A key question is how the additional government spending would affect the country’s sovereign ratings and in turn, hurt investor sentiment. “Country sovereign ratings are also a common parameter used to decide the amount of investment allocations by portfolio investors. “Any sovereign downgrade could trigger an adjustment to both price and volume of financial investments, ” he adds. According to Mohd Afzanizam, government finances make up a large part of the sovereign credit rating matrices. “I don’t believe at this stage it is mutually exclusive between sovereign ratings and livelihood, ” he says.

Source: The Star June 25, 2021 23:59 UTC