Wednesday, 08 Jul 2020
26/02/2020 01:59 PM

By M.Saraswathi & Aishah Mohmad Afandi

KUALA LUMPUR, Feb 26 -- There are the normal blue skies, warm weather and traffic congestion. And, Malaysians are at work and play, as usual, unperturbed by the political goings-on since Sunday.

The attempt to bring about a realignment in the political landscape of the country resulted in the collapse of the Pakatan Harapan (PH) government on Monday.

Prime Minister Tun Dr Mahathir Mohamad also stepped down and was subsequently appointed interim prime minister.

This political uncertainty saw the Bursa Malaysia key index dip 2.68 per cent or 41.14 points to 1490.06 points on Monday to register its lowest level since December 2011.

However, when something negative happens, there is always the positive side as well.

Our financial markets continue to function efficiently with ample liquidity despite the political developments.

Foreign reserves remain resilient, and our fundamentals are strong as well.

"The Malaysian financial markets continue to function efficiently with ample liquidity despite the recent developments in the country," Bank Negara Malaysia said yesterday, giving the assurance that there is ample liquidity in the country for businesses to continue operating.

Despite opening under pressure on Tuesday and today (Wednesday), the key index FBM Bursa Malaysia KLCI (FBM KLCI) have shown resilience by rebounding at mid-morning sessions and maintaining to be in the positive territory until closing. 

As of today at lunch break, the FBM KLCI was recorded at 1,505.73, up 15.67 points since the slide on Monday backed by encouraging performance of key index holders. 

It must be noted that at this time, key market indicators, such as Dow Jones Industrial, Japan's Nikkei, South Korea's KOSPI, Singapore’s Straits Times and Hong Kong's Hang Seng, all recorded a downtrend due to concerns over the COVID-19 global health situation.

Dow Jones was 3.03 per cent lower after shedding 879.44 points at 27,081.36, Nikkei was 0.92 per cent lower at 22,397.59, KOSPI was down 1.07 per cent to 2,081.14, Hang Seng shed 0.49 per cent 26,397.59 and Straits Times fell 0.94 per cent to 3,128.57.   

Even with just an interim prime minister, the country continues to function with civil servants discharging their duties as usual. 

Chief Secretary to the Government Mohd Zuki Ali had chaired a special meeting with the secretaries-general of all ministries to ensure that it is business as usual in the civil service.

Zuki said the meeting was held to ensure continuity of planning and implementation of government policies for the benefit of the people and the country.

Malaysia is again proving itself to be a matured nation, having done so soon after the general election in 2018 when PH came to power following the 60-year rule of the Barisan Nasional (BN).

As for the financial and stock markets, despite calls for the government to reduce holdings to boost financial liquidity in the capital market at times of uncertainty, these holdings are key to stability that prevents extreme volatility in the markets.

An analyst told Bernama that the probability of the equity market dipping more than 30 per cent, triggering a circuit breaker is unlikely as the government holds almost 65 per cent of the local market, as well as the majority shares of the top composite index holders. 

Key index holders Maybank and Sime Darby Plantation, which are linked to Permodalan Nasional Bhd, one of the largest fund management companies in Malaysia, and Tenaga Nasional, CIMB, IHH and Axiata -- linked to sovereign wealth fund Khazanah Nasional. 

All the counters, which contributed 53.48 points to the total composite index, have a direct link to the government-linked funds. 

It is undeniable that the US-China trade war, COVID-19 health crisis, as well as developments in the United States, leave an impact on the market, but not a severe one.

Political developments similar to what is taking place in Malaysia would have seen governments under siege, riots and a steep fall in the market in some other countries.

In Malaysia, the wisdom of Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah has reigned supreme.

His Majesty wasted little time in taking stock of the situation and to do “my duty”.

“I hope we will find the best solution for the country," the Ruler said as he interviewed all the 222 MPs to gauge what best could be done for the nation.

Regardless of what unfolds in the next few days, all planned programmes will be implemented as scheduled.

These are the National Automotive Policy, 5G network acceleration, National Anti-Corruption Plan and the much-awaited economic stimulus package, to name a few. 

Most of all, we managed to keep COVID-19 at bay, addressing the issue way better than some developed nations, given the dedication of health professionals in the Health Ministry.  

Everything said, who would have imagined that one day we would be ruled by a 94-year-old Interim Prime Minister with the blessings of a wise King and the civil servants, to quote veteran newsman Datuk A. Kadir Jasin.

--BERNAMA

 

 

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