US Crisis: Direct Impact On Malaysia?

Economic analysts feel Malaysia was unlikely to be impacted in a big way by the collapse of two venerable Wall Street financial institutions, Lehman Brothers and Merrill Lynch, local media reported yesterday. Both firms were victims of the sub-prime crisis in the United States.

"I can't see it having a direct impact on Malaysia. Any impact is likely to be indirect," said Wong Ming Tek, head of research at HwangDBS Vickers Research. Banks in Malaysia had in the last few months said they didn't have any major sub-prime exposure, and as such, Malaysia is likely to be spared the direct fallout from the collapse of the two financial institutions.

News of their collapse will, however, affect investor sentiment. On Monday, it sent stock markets in Europe and Asia reeling. "This will inevitably affect our stock market valuations," said Clement Chew, head of equities broking at JP Morgan in Malaysia.

Lehman, which Monday filed for bankruptcy protection in the US, does not have a presence in Malaysia.