KUALA LUMPUR, Oct 18 — The finance minister today said the government’s decision to terminate several mega projects was not the reason behind the sudden loss of RM1.05 billion in foreign investment from Bursa Malaysia last week, shaking confidence in the economy.
Replying to Pontian MP Datuk Seri Ahmad Maslan (Barisan Nasional) during Question Time, Lim said that the outflow was due to other external factors, including US-China trade tensions.
“The weakened market was due to external factors dominating investor’s behaviour. Among them are the trade tensions between US and China which has resulted in an impact on China’s economy;
“The uncertainty in the European market coupled with the Brexit negotiations have caused tension in the region; and also the pressure on oil prices because of the tense relation between Saudi Arabia and the US after the murder of journalist Jamal Kashoggi,” said Lim.
From May 10 to October 13, 2018, Malaysia has had an investment outflow of US$3 billion in the equity market when compared to Thailand at US$4.6 billion, Indonesia at US$1.4 billion and SIngapore at US$850.4 million.
This led to a weaker market performance throughout the region. However, Lim said that the Ringgit's depreciation against the US dollar is more stable when compared to the rest of region.
“Ringgit has depreciated yy 2.15 per cent against the US dollar while Indonesia dropped by 10.44 per cent, Singapore by 2.82 per cent and Phillippine down by 7.3 per cent. This shows that investors are still confident in Malaysia and the nation's ability to hold out against external economic challenges,” he said.
Ahmad Maslan then asked Lim about the impact of the axed projects, saying that those were external factors which affected the market and wanted to know the impact coming from the domestic market.
Lim replied that a single company does not have such a strong impact on the market.
“On the domestic factor ― a single company is not the reason (behind the outflow). It does not have such a big impact. The global stock market has been influenced by the US economy ― especially the trade war the US have against the world ― especially China,” he replied.
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