Finance Minister: Ringgit, stock market unaffected by country's Fitch Ratings downgrade


KUALA LUMPUR: There was no "knee-jerk" reaction from the stock market despite Fitch Rating's downgrading Malaysia's sovereign debt rating, says Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

"Since the announcement, there has been no knee-jerk reaction from the stock market.

"In this respect, the FBM KLCI and ringgit remained stable and we recorded a high bid-to-cover ratio demand of 2.6 times above the value of government MGII 10-year bonds offered last week," said the Finance Minister in reply to a question from Lim Guan Eng in Parliament on Tuesday. (Dec 15).

He noted that investor confidence in Malaysia remained positive, adding this could be seen from eight venture capital fund managers from the United States, South Korea, China, Indonesia and Singapore who had agreed to invest RM1.57bil in Malaysian start-up companies.

He also said that the A- to BBB+ Fitch Rating downgrade to Malaysia's sovereign rating was also coupled with an improved outlook from "negative" to "stable".

Zafrul also told lawmakers that most global rating agencies had issued some 220 negative ratings since early March this year.

"This includes downgrading ratings for over 100 countries which includes the United Kingdom, Hong Kong, Chile and Laos," he added.

Although Malaysia's rating did not go against the global ratings trend, Zafrul said he had voiced its stand over the downgrade.

He added that did not take into account the effective implementation of the economic recovery and stimulus packages.

Zafrul said that the nation's gross domestic product had shrunk at a slower pace of 2.7% in the third quarter compared to 17.1% in the previous quarter, the best in the Asean region.

He added that some 2.8 million employees retained their jobs through the Wage Subsidy Programme which helped reduce the unemployment rate from 5.3% in May to 4.7% in October.

He said that Johns Hopkins University had also noted that Malaysia achieved one of the lowest global Covid-19 mortality rates.

On political appointments of directors in government linked companies (GLC), Zafrul said such appointments were done based on qualification, experience and expertise in line with the policy under the Malaysian Code of Corporate Governance.

Based on the status of the company, he also said that political appointments must also undergo screening by Bursa Malaysia, Bank Negara, the Malaysian Anti-Corruption Commission, police and others.

He informed the House that the government remained committed to strengthening the economy while improving good governance.

He said this includes the tabling of a Fiscal Responsibility Bill to ensure better fiscal management and transparency.

Lim, the former finance minister, had asked what the government was doing to address the recent Fitch Ratings downgrade as well as the issue of political appointments to GLCs.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Nation

Workers urged to get jabbed
Companies offering incentives to workers to get vaccinated
Govt is all for making workplaces safer for employees
Sabah authorities gear up to increase vaccine awareness
Four out of every five adults vaccinated in Klang Valley
Flocking to coconut stalls to stay hydrated
Centenarian great-great-grandma shows the way
‘Nasi ganja probe deepens’
Hunt on for patient who fled on the way to quarantine
PM launches new nutrition policy

Stories You'll Enjoy


Vouchers