Malaysia has resilient capital market ecosystem, says Tengku Zafrul

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the continued operations of the capital market are important to support the resilience and recovery of the economy, as well as help investors manage their risks and opportunities during this period.

PETALING JAYA: The government has assured that its capital markets will remain open to support and facilitate fundraising, trading and investment throughout the movement control order (MCO) and Emergency ordinance periods.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the continued operations of the capital market are important to support the resilience and recovery of the economy, as well as help investors manage their risks and opportunities during this period.

“I would also like to highlight that Malaysia has a resilient capital market ecosystem, supported by ample liquidity. There are proper market management measures in place to manage volatility.

“Clearing funds, margins and deposits arrangements are also in place to manage clearing and settlement risks, ” he said in a statement yesterday.

Tengku Zafrul said the Securities Commission, together with Bursa Malaysia, would continue to monitor the ongoing developments to proactively manage and mitigate risks in the marketplace and will introduce additional precautionary measures, as appropriate.

“In terms of financial intermediation and payment systems, the operations of financial institutions and financial markets will continue as usual, with services remaining available and accessible to borrowers.

“Bank Negara continues to actively monitor conditions in the financial markets to ensure that there is sufficient liquidity in the foreign exchange, bond and money markets and that market conditions remain orderly.”

Tengku Zafrul said the banking system buffers and sound risk management practices are able to mitigate the impact of any potential deterioration on credit quality, as well as continue to support lending by banks to the economy during the duration of the emergency ordinance and various forms of MCO implementation.

“Going forward, the government will continue to roll out the measures in Budget 2021 to firmly place Malaysia on its recovery path in 2021. More importantly, there is sufficient domestic liquidity to support any additional fiscal stimulus to support lives, livelihoods and businesses, if necessary.

“In fact, the Finance Ministry has begun considering various measures to support the rakyat and businesses during this period. We will not compromise on the rakyat and businesses’ well-being.”

Tengku Zafrul emphasised that Malaysia’s sound economic fundamentals would continue to enable the government to respond effectively to the challenging environment, whilst maintaining economic growth and resilience.

“I would like to re-emphasise that the government remains committed to build upon the current recovery momentum and ensure long-term sustainability for both our public finances and the economy.”

As the world navigates Covid-19, one of history’s worst pandemics, Tengku Zafrul said governments globally have committed US$11.7 trillion (RM47 trillion) in economic stimulus measures to protect lives and livelihoods.

“The Malaysian government has also responded swiftly in addressing the Covid-19 crisis through four stimulus packages worth RM305bil in 2020 to help our people and businesses.

“Further supporting our road to recovery are the measures outlined in Budget 2021, valued at RM322.5bil, structural reforms to be announced under the 12th Malaysia Plan, as well as Malaysia’s track record of economic resiliency.”

Despite firm Covid-19 containment measures, Tengku Zafrul highlighted that the number of infections in Malaysia has been on the rise, with daily infections rising to its highest level of 3,309 cases yesterday and average daily infections hovering above 2,000 cases.

“Although Malaysia’s case-fatality ratio which, at 0.4%, is within the lowest 10% globally, the rising daily cases of infections has caused a strain on the nation’s public healthcare system.

“In recognition of the Yang di-Pertuan Agong’s declaration of a public health and economic emergency and Prime Minister’s announcement of various forms of MCO this week, the government would like to assure all Malaysians and investors that the administration of the country has always been facilitated by a well-regulated financial system, including the capital and financial markets.”

Separately, the Malaysian Investment Development Authority (MIDA) said it would continue facilitating investors and businesses during the MCO.

MIDA, which is the government’s principal investment promotion and development agency under the International Trade and Industry Ministry, said it will continue its operations with reduced headcount at MIDA Sentral, to assist businesses in their operations.

“In prioritising all employees’ safety while also minimising disruptions to services and operations of businesses, Mida officials will be working from home on a rotational basis, ” it said.