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KUALA LUMPUR - The Malaysian government will inject RM20 billion (S$6.6 billion) into a state equity investment firm to shore up the stock market, Prime Minister Najib Razak said on Monday (Sept 14), in a bid to boost confidence in a country reeling from a political scandal.
Datuk Seri Najib told a news conference that the equity investment firm, ValueCap, will invest in undervalued Malaysian companies.
“The government will reactivate ValueCap with funds of RM20 billion,” he told reporters at the Prime Minister’s office. "ValueCap was established in 2002 as an entity to support undervalued stocks and the result was effective as it managed to stabilise the stock market,” he added.
He also announced that the factory sector would be exempted from import duties until the economy recovers from a slowdown, but did not specify which specific sectors would be affected.
The ringgit’s fall reflects a deterioration in Malaysia’s trade position because of falling prices for its liquefied natural gas and commodity exports.
But capital outflows accelerated in July as Mr Najib became enmeshed in a political scandal raging around indebted state fund 1Malaysia Development Bhd (1MDB).
The prospect of government support for the share market helped lift Malaysia’s benchmark stock index slightly as it went into the midday break 0.56 per cent higher at 1,612.52 points. The ringgit was largely unmoved.
The severity of the ringgit’s depreciation prompted Mr Najib to form an economic task force, including some of the country’s top financiers, to find ways to restore confidence.
“The ringgit’s decline is not expected to have adverse impact on government debt as 97 per cent of the debt is denominated in ringgit and mostly funded by domestic sources,” the Prime Minister said.
His failure to explain how 1MDB racked up US$11 billion (S$15.5 billion) in debt or who deposited over US$600 million in a bank account held in his name has led to mounting public unease over his leadership.
He has denied wrongdoing.
He said on Monday that the rationalisation plan for 1MDB is on track. He also reiterated that there were no plans to introduce capital controls, adding that the government was on track to achieve fiscal consolidation target for 2015.
http://www.straitstimes.com/busines...ivers-a-6b-boost-for-stock-market#xtor=CS1-10
Datuk Seri Najib told a news conference that the equity investment firm, ValueCap, will invest in undervalued Malaysian companies.
“The government will reactivate ValueCap with funds of RM20 billion,” he told reporters at the Prime Minister’s office. "ValueCap was established in 2002 as an entity to support undervalued stocks and the result was effective as it managed to stabilise the stock market,” he added.
He also announced that the factory sector would be exempted from import duties until the economy recovers from a slowdown, but did not specify which specific sectors would be affected.
The ringgit’s fall reflects a deterioration in Malaysia’s trade position because of falling prices for its liquefied natural gas and commodity exports.
But capital outflows accelerated in July as Mr Najib became enmeshed in a political scandal raging around indebted state fund 1Malaysia Development Bhd (1MDB).
The prospect of government support for the share market helped lift Malaysia’s benchmark stock index slightly as it went into the midday break 0.56 per cent higher at 1,612.52 points. The ringgit was largely unmoved.
The severity of the ringgit’s depreciation prompted Mr Najib to form an economic task force, including some of the country’s top financiers, to find ways to restore confidence.
“The ringgit’s decline is not expected to have adverse impact on government debt as 97 per cent of the debt is denominated in ringgit and mostly funded by domestic sources,” the Prime Minister said.
His failure to explain how 1MDB racked up US$11 billion (S$15.5 billion) in debt or who deposited over US$600 million in a bank account held in his name has led to mounting public unease over his leadership.
He has denied wrongdoing.
He said on Monday that the rationalisation plan for 1MDB is on track. He also reiterated that there were no plans to introduce capital controls, adding that the government was on track to achieve fiscal consolidation target for 2015.
http://www.straitstimes.com/busines...ivers-a-6b-boost-for-stock-market#xtor=CS1-10
