Dateline 2014-12-02, Barron’s:
Malaysia may have just set itself up for a major oil shock.
That may seem a long shot as crude prices plummet. But Malaysia is one of Asia’s few remaining net oil exporters and last month it made the decision to scrap subsidies on diesel and unleaded gasoline and instead set their prices more or less in line with market prices beginning this month.
Markets appear to have ignored this watershed. Global investors may not know a lot about Malaysia, but they do know it’s a major commodities exporter whose economy is slowing with exports and whose government depends on oil-related income for 30% of its annual revenues. Stocks in Kuala Lumpur fell as much as 2.3%, the biggest tumble in almost two years, to the lowest since late-October. Government bonds fell, too. Malaysia’s currency, the ringgit, slid as much as 1.4% against the U.S. dollar to its lowest since early 2010.