Saturday, February 25, 2017

The joys of being temporarily Malaysian.

With the ringgit at an all-time low, I went into Malaysia for a few hours with my mum during my mid-term exams. We did not venture far into Malaysia, we just hung out at City Square very possibly the most expensive part of the entire country because it is the closest mall to Singapore.

Shopping in Malaysia is a liberating experience for me. I am always counting my expenses in Singapore. In Malaysia, I feel liberated and I can spend my money anyway I want in any restaurant that I like. I also become more open to food and luxury articles in investment magazines like the Edge.

( I still hate the local lifestyle articles in our business weeklies because they distract from investing in the markets. )


What I observed is that the low Ringgit must have really warped the economy of the country.

Hakka vegetarian dumplings cost me $7.50 MYR. This is not considered cheap by Malaysian standards but it is for folks from Singapore. A curry bee boon Yong Tao Fu is about $12.50, quite ridiculous for someone on a Johor paycheck but only about $4 SGD after currency conversion. I actually got a Singapore-designed Kalashnikov gaming keyboard for $22 SGD after conversion when I was sure that similar model cost $35+ back home.

This is painful for Malaysians who work in Johor. A monthly salary of a first year lawyer after pupillage in Johor Bahru is $3,000 MYR or less than $1,000 SGD. A fresh Singapore ITE graduate can earn $1,700 a month.

We might even see SGDMYR=$3.33 as early as this year if the Singapore economy surprises on the upside. As the Malaysian ringgit keeps trending lower, many Singaporeans and Malaysians will attempt to do some geo-arbitrage between the two countries.

The trick is to confine all your expenses in Malaysia and then earn and invest in Singapore. I can imagine after the office buildings get built in Woodlands, many folks will try to geo-arbitrage by trying to live in Johor and work in Singapore.

Investing in Malaysia is also really something which deserves another blog writeup. In the Malaysian Smart Investor magazine ( yes, they still have a monthly investment magazine ), a couple of fund managers are advising readers to buy S-REITS citing our high yields. If I can only invest in Malaysian REITs and equity counters, I would still be working today. Their top yielding REITs are only giving out around 5-6% not counting withholding taxes although this makes their high yielding equity counters much more attractive in comparison.

Over time, both countries will try to make it hard for you to cross the causeway and to do this will employ toll charges across their customs checkpoints but the single biggest issue is personal security.

There is a saying that a Johorian that has never been robbed is not a real Johorian. If you really want to live and work in Malaysia, you need to factor into your living expenses adequate security systems. But even if you are a multimillionaire in Malaysia who can afford bodyguards, who can protect your from your bodyguards ?

Just a final tip.

Malaysia's low exchange ensures that any product with a higher rental and labor cost component would be cheap compared to what we pay back home. So the trick is to stick to food, watching cinema and personal services like massage, nail manicure and the same stuff some uncles do near Peace Centre.

Imported branded goods don't make as much sense although Mr. DIY (A Malaysian chain that is a mix between Daiso, Toy R Us and Homefix)  always has something worth buying when I go there.






3 comments:

CreateWealth8888 said...

Move up farther North beyond JB; the purchasing power of SGD becomes even bigger. :-)

Christopher Ng Wai Chung said...

Agreed !

Better deals come around at Kulai and gets better further North.

By the time you leave Johor State, you can live like kings.

That's if you don't get mugged.

Regards

Game1980 said...

same stuff some uncles do near Peace Centre.

Why uncle need to photocopy?