Friday, June 25

Post GE13 Bursa surge a boost to gov’t economic plan

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KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak says Bursa Malaysia’s surge of more than 100 points, closing out the biggest one-day gain in its history a day after Barisan Nasional retained power in the last 13th general election, indicated the market preference on the government’s economic agenda over the Opposition’s.

“It was tempting to see the rally as an endorsement of the path we have chosen for Malaysia.

“But it was also an expression of relief. After a year of growing uncertainties, political risks have eased,” said Najib who is also Finance Minister in his keynote address at the Invest Malaysia 2013 Conference organised by Bursa Malaysia and co-sponsored by Maybank Investment Bank yesterday.

May 6, a day after the general election, the FTSE Bursa Malaysia KLCI closed at a historic high of 1,752.02 points, with analysts attributing it to the victory by the pro-business BN, which would continue to be in power.

Analysts said the bourse would continue its ascension, with investors starting to deploy their cash, which had been sidelined, awaiting the outcome of the election results.

They said that thereafter, there would be a surge in buying activities led by foreign and local institutional investors.

The market is currently trading at 1,756.18 points.

Going forward, the prime minister said, the next five years would present the government with opportunities to set Malaysia’s path for decades to come.

“I understand and acknowledge the message from voters; that as we proceed along this path, we must be transparent and accountable, and that the benefits of economic transformation must flow to all Malaysians.

“I will work to ensure our national success leaves no one behind,” he said.

In an uncertain world, he said, Malaysia stood out as an attractive investment destination, home to one of the leading capital markets in the region, boasting the fourth most active corporate bond market in Asia and the fifth largest IPO market in the world.

“Combined, they are two-and-a-half times greater than the gross domestic product (GDP), providing vital funding for domestic and international businesses.

“Indications are that this interest in Malaysia will be sustained.

The primary market is expected to remain robust this year, with the bulk of funding coming from the bond market (and) the IPO pipeline anticipated to remain strong, with even more issuers than last year.

“This year, foreign participation on Bursa Malaysia topped US$1 billion for the first time.

“Companies listed on the KL Composite Index now generate 45 per cent of their revenue from overseas,” said Najib.

He said this year has already seen large net foreign inflows into both markets, with assets under management having grown to RM505 billion and the unit trust net asset value rising steadily, reaching 20 per cent of equity market capitalisation.

Najib said the launch of alternative structures like business trusts would further open up the capital market.

To this end, he said, efforts were already underway to promote greater inclusiveness of financing and ensure better access for start-ups, aspirising entrepreneurs and small to medium-sized entities. — Bernama