Malaysia IT spending prospect 2006 - v2

Just yesterday, we were talking about how the rise in interest rate would help spur ICT activities in the country, today the Malaysian ringgit came to a soaring 8 years high, closing 3.6 to the US dollar. This is expected, to the experts of course, because once the interest rate is increased, spending would reduced (to deflate inflation) and there will be less Malaysian Ringgit flowing around the globe. Thus, demand for Ringgit would thus increased inevitably.

All these proves that Malaysian would be richer to a certain percentage and business trade would be decreased as expected reaction. This is actually good for consumerism. In other words, retails profits, suppliers to consumers activities would increase while b2b (business to business) activities would decrease; a natural choice to increase net income per se.

China also increased its benchmark interest rate and caused the oil prices down to US 71.35 from US 73.00. This proves that interest rate hike would give rise to decrease demand for trading; to benefit from higher profit margin.

To conclude this per se, year 2006 would be a great year for ICT spending in Malaysia. Driven by a few key factors and growing supporting factors:

1. The government just announced the 9th malaysian plan
2. Interest rate increased by 0.5% percent which improves the wealth of Malaysian people in the macro point of view
3. Currency gained strenght which also signifies the overal increased of wealth for the people.