The Malaysian economy has come to a fork in the road, and economists are wondering how isolated the country’s economy is from that of the United States’, and what this means for investors of the exchange traded fund (ETF).

Some economists have reveled in the fact that the Malaysian economy has gone through a decoupling of sorts from the U.S. economy. But it’s imperative for policymakers and local investors to be on guard about the possible bumps in the road that could form, as Malaysia’s exports to the States accounts for 16% of the country’s total exports, reports Shankaran Nambiar for The Star.

And interestingly, 15% of Malaysia’s exports go to Singapore, but a substantial portion of those exports ultimately wind up re-routed to the United States.

In 2001, the dot-com bubble burst and the growth rate in Malaysia went down to 0.5%, so this fact alone is keeping analysts on the cautious side. This also voids any notion that the Malaysian economy is totally separate from that of the United States’. Our current woes here have Malaysians concerned.

It’s perhaps with good reason, as iShares MSCI Malaysia (EWM) is down 22.6% year-to-date.

Tags: Asia, Emerging Markets, EWM, Malaysia

Share: Digg | Bookmark at Del.icio.us |