The diverging economic fortunes of two Southeast Asian neighbors are prompting PineBridge Investments to favor Malaysia’s ringgit over Singapore’s dollar.
The ringgit has gained 4 percent to 2.53 per Singapore dollar since reaching a 16-year low of 2.63 in February, data compiled by Bloomberg show. Malaysia’s five-year government bonds offer investors a yield almost three times that available on the city-state’s similar debt after Zeti Akhtar Aziz became Southeast Asia’s first central bank governor to raise borrowing costs this year.
“There is a strong, underlying trend supporting the Malaysian ringgit against the Singapore dollar,” Anders Faergemann, who helps oversee $4.3 billion of emerging-market debt as senior fund manager in London at PineBridge, said in an Aug. 15 e-mail interview. “We believe the currency pair has room for a wider correction before year-end.”
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