KUALA LUMPUR (May 2): It is too early to expect that the Putrajaya's planned reforms have concluded, according to RHB Investment Bank Bhd, who believe new policies from the Pakatan Harapan (PH) coalition who took over the government last May, are still emerging.

“I think that the execution of their new policies is still emerging. I don’t think we have seen the conclusion of their reforms just yet,” said its regional equity research head Alexander Chia.

He is also of opinion that the new government's manifesto promises will unlikely be achieved in full, as the government had inherited bigger problems than it originally anticipated, which it has to deal with.

“In this day and age, the market expects overnight results or overnight gratification. But… I think it is quite accurate to say that the new government had inherited a lot of problems in relation to the government finances,” Chia said in a press conference, after the launch of its RHB Small Cap Book 20 Jewels 2019 edition today.

“[Yes,] it's been almost 12 months since GE14, [but the] issues that clearly need fixing are not something that can be rectified conclusively in just a year,” Chia said, adding that a lot of the PH ministers also need to undergo some sort of learning curve with regards to their respective portfolio.

“While it will take time to fix it (issues), I believe they are on the right track,” Chia said.

He also cited as examples, how regional stock markets such as Indonesia and India took approximately 18 to 20 months to understand where their new governments were heading to, and to get more comfortable with the direction set, before those markets recovered.
 
Thus, it is not surprising if Malaysia will need that long a period to adjust, Chia said.

Once the market understands the introduced new policies and once the new growth initiatives kick in, the economy will continue to grow, Chia added.