KUALA LUMPUR: The recent decline in the Malaysian stock market is a short-term overcorrection, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said the decline is temporary and Bursa Malaysia has already shown signs of recovery.
“We see that sometimes trading positions are taken and then resettled, causing the market to drop due to the resettlement. However, this is short term. Sometimes overcorrection happens, and we can see that Bursa has already gone up again,” he told reporters at KWAP Inspire Conference 2024 themed “Advancing Circular Transformation for a Climate-Smart Malaysia” today.
Amir Hamzah stressed that the fundamental strength of Malaysia’s economy, particularly its gross domestic product (GDP) growth, underpins this optimism.
“We hope that the real economy, which is the most important underlying factor, remains strong. If we look at GDP, Malaysia is indeed strong. So, God willing, we are on the right track, and God willing, we will continue to grow,” he said.
He highlighted the second quarter’s advanced GDP number, which rose to 5.8%. “If we take the average of the first and second quarters, it is 5% for the first half,” he added.
Amir Hamzah pointed to other positive developments in Malaysia’s economic situation, particularly the strengthening of the ringgit. “Alhamdulillah, the ringgit has significantly strengthened. This is the result of the efforts made by the government over the years,” he said.
The government has been working to implement policies aimed at strengthening the economy, Amir Hamzah said. “Under the current economic policy, we focus on raising the ceiling so that we can attract many businesses to Malaysia. Many investors have already come in.”
He added that this positive outcome is not only due to the expected US interest rate cuts but also because of the good policies implemented by the government which have increased confidence in Malaysia.
Yesterday, Bursa Malaysia fell 74.57 points amid plummeting regional markets. However, on the same day, the ringgit experienced its largest surge in nine years, rising as much as 2.3%, and outperforming other developing currencies, such as the Chinese yuan.
The FBM KLCI rebounded today, closing 37.91 points or 2.46% higher at its intraday peak of 1,574.39.
In his speech earlier, Amir Hamzah highlighted the government’s commitment to sustainability through the National Energy Transition Roadmap (NETR). “It is the nation’s strategic plan and a key impact lever under the Madani economy framework, to move our energy systems away from conventional, fossil fuel-based sources towards cleaner, more sustainable alternatives.”
Amir Hamzah said he is pleased to see KWAP – Kumpulan Wang Persaraan (Diperbadankan) or Retirement Fund (Incorporated) – which is Malaysia’s largest public sector pension fund for civil servants, taking strides in sustainability, such as hosting the conference and launching initiatives like Dana Perintis and Dana Pemacu, which target key economic sectors aligned with the Madani Economy framework.
“These are efforts that foster innovation and drive the development of a more resilient and sustainable Malaysian economy by funneling capital towards sustainable solutions and businesses.
He added that KWAP is not alone in this endeavour as the Finance Ministry is driving another key impact lever of the Madani economy involving KWAP and five other government-linked investment companies (GLIC), namely Khazanah Nasional Bhd, Employees Provident Fund, Lembaga Tabung Haji and Lembaga Tabung Angkatan Tentera.
“This programme aims to leverage the collective strength and investment muscles of the country’s key institutional investors towards achieving the Madani economy aspiration to build a better Malaysia.
“This most certainly also includes initiatives supporting the NETR to combat climate change. For instance, developing green and smart Industrial parks, catalysing climate financing, and accelerating the energy transition by scaling up renewable energy, championing low carbon technology and investing in grid modernisation efforts,” Amir Hamzah said.
He added that the distinctive feature of this programme is the commitment of these GLIC to work together in the spirit of an all-of-nation approach. “The synergy from this collaboration will ensure greater momentum, reduce overlaps and wastage of resources, and ultimately have a stronger impact on targeted outcomes,” he said.
