NEAC and Cabinet should ensure that the government does not decide or do anything to arrest and reverse the agonising climb-back of the Malaysian ringgit and the KLSE Composite Index

- Bukit Mertajam DAP Branch
Chinese New Year gathering
by Lim Kit Siang

(Penang, Friday): The news in the post Qongxi Raya money and stockmarkets in Kuala Lumpur had never been so good in the past few months, with the Kuala Lumpur Stock Exchange Composite Index closing at 727.19, which is a three-month high since November 6 when it closed at 731.04 points.

The Malaysian ringgit also strengthened to 3.8450 against the US dollar, a level it had not seen for seven weeks.

It is really tragic that there should be so much relief that the KLSE CI had climbed above the 700 point level, when six months ago, it was completely unthinkable that the KLSE CI could descend from the four-digit level to crash below the 700 point level, let alone testing the 450-point level.

The same applies to the Malaysian ringgit. There is nation-wide relief that the Malaysian ringgit has finally strengthened to 3.8450, when five, six months ago, it was also unthinkable that the Malaysian ringgit could have fallen so low in relationship to the US dollar as no one had ever thought that it could be anything but US$1=RM2.50.

Every Malaysian hopes that the worst has been reached as far as the Kuala Lumpur stock market and the depreciation of the Malaysian ringgit are concerned, although nobody would dare to be sure, as the various "bottom has been reached" forecasts in the past seven months had proved to be very short-lived.

Even before the Prime Minister, Datuk Seri Dr. Mahathir Mohamad made his call in August to Malaysians to enter the stock market, the Economic Adviser to the Government and former Finance Minister, Tun Daim Zainuddin, has as far back as 10th July 1997, called on local investors to take the lead in the KLSE instead of being led by foreign investors.

He said: "Now, that the market is so low, we should take the opportunity to buy. When it (price) is high they complained, but when it is low they are not buying".

When Daim first made the call to buy shares in the stock market, the KLSE CI had been on a downward descent but it still closed at 1,008.52 points.

With the fragile recuperation of the KLSE CI and the Malaysian ringgit, the National Economic Action Council (NEAC) and the Cabinet should ensure that the government does not decide or do anything to arrest and reverse the agonising climb-back of the Malaysian ringgit and the KLSE CI.

Malaysians can understand if the Malaysian ringgit and the Kuala Lumpur stockmarket nosedive because of external developments, but they have a right to demand an end to the long list of self-inflicted wounds caused by bad government and corporate decisions which had aggravated market sentiments resulting in the plunge of shares and the Malaysian ringgit.

This is the first task of the NEAC and the Cabinet. The second task is to strengthen the fundamental strengths and remove the fundamental weaknesses of the system in the country through wide-ranging political, economic and financial reforms.


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong