Project cancellations not spooking foreign investors, says Guan Eng

KUALA LUMPUR: The Finance Minister has denied that the government’s cancellation or review of certain projects has spooked foreign investors away from the equities market.

Lim Guan Eng said there were several external factors that have dampened the market, citing the ongoing trade war between China and the United States, and the diplomatic tensions between the Middle East and the United States, following the disappearance of Washington Post journalist Jamal Khashoggi, who is believed to have been brutally murdered by the Saudi regime.

“Regarding the (internal) factors that caused the downfall of shares, it is not because (the termination) of one or two companies.

“(These) did not have a big impact, and I believe it is not just Bursa Malaysia, but the global market which has been affected by the US trade war,” he said in reply to a question from Datuk Seri Ahmad Maslan (BN-Pontian) during Minister's Question Time.

Ahmad had asked the government to explain the reason why foreign investors had withdrawn some RM1.05bil net worth of equities last week, the largest foreign net outflow in 16 weeks.

He also wanted to know whether this had anything to do with the recent termination of the MMC-Gamuda MRT2 contract and the possibility of new taxes in the upcoming Budget 2019.

On Oct 7, Lim said the Cabinet had decided to terminate the MMC-Gamuda contract to build the underground portion of the MRT2 project, adding that all unfinished underground work would be re-tendered via an open tender process.

However, following protests from Gamuda that the decision would result in job losses affecting about 20,000 workers, Prime Minister Tun Dr Mahathir Mohamad said on Oct 9 that the government would reconsider the decision.

On the possibility of new taxes or increases in current taxes, Lim asked lawmakers to wait until Nov 2 when the government would table the Budget.

The Pakatan Harapan led-government, he said, would continue to address the fiscal problems it has inherited from the previous Barisan Nasional government by introducing new policies to further strengthen competitiveness, productivity and profits for companies.

Lim added that he would meet with ratings agencies to give a clearer picture on the country's equity market after tabling the Budget.

He said this move was to give a full explanation to these agencies in a bid to attract move investors to the country.

“After the tabling of the Budget, I am planning to meet with all the main ratings agencies to them more detailed explanations so there will be more liquidity in the market, and to attract investors to the country,” he said in reply to a supplementary question from Datuk Seri Mustapa Mohamed (Independent-Jeli) during the Minister's Question Time.

He had asked the Finance Ministry to detail the steps taken to promote the country's equity market among foreign investors to further boost Malaysia’s profile at the international level.

Mustapa was formerly the International Trade and Industry Minister.