KUALA LUMPUR, MALAYSIA - Analysts said Malaysia was unlikely to be impacted in a big way by the collapse of two venerable Wall Street institutions, Lehman Brothers and Merrill Lynch.

Both firms were victims of the sub-prime crisis in the United States.

"I can't see it having a direct impact on Malaysia. Any impact is likely to be indirect," said Wong Ming Tek, head of research at HwangDBS Vickers Research.

Banks here had in the last few months said they didn't have any major sub-prime exposure, and as such, Malaysia is likely to be spared the direct fallout from the collapse of the two financial institutions.

News of their collapse will, however, affect investor sentiment. Yesterday, it sent stock markets in Europe and Asia reeling.
"This will inevitably affect our stock market valuations," said Clement Chew, head of equities broking at JP Morgan in Malaysia.

On another front, there are also concerns about the extent the collapse will have on the American economy and consequentially, global growth.

"A slower US economy will hurt growth forecasts in Asia and Europe," Chew said.

Lehman, which yesterday filed for bankruptcy protection in the US, does not have a presence in Malaysia.

Merrill, however, which agreed to be bought by Bank of America in an emergency US$50 billion (RM171 billion) sale, has a small research presence here.

Both firms have offices in the Asia-Pacific region.