Budget 2001 - Loud Negative Market Vote

Media statement
by Lim Kit Siang 

(Petaling Jaya, Tuesday): In his 2001 budget speech, Finance Minister Tun Daim Zainuddin  used the Kuala Lumpur stock exchange performance as an important indicator of the success of the government’s economic strategy for economic recovery and rebound.

As Daim said:

If Daim’s use of the Kuala Lumpur stock exchange is adopted as a barometer of market response to the budget, it is clear that the outcome is a loud negative market vote against the budget.

The stock market was falling during Daim’s budget presentation, with the KLCI ending 5.14 points lower at 791.08 at the close of trading.

Yesterday’s sharp fall in the KLCI is the strongest evidence of market disappointment at the 2001 Budget, where it shed 16.77 points to 774.31 points, hitting an intraday low of 767.31 points.  The KLCI has continued to plunge today, falling by 21.02 points to 753.29 at the end of closing this morning.

The market has spoken loud and clear as the KLCI had fallen by 42.93 points from 796.22 to 753.29 from the budget presentation to the close of this morning’s trading - a  hefty fall of  5.4%.

As this is one of the sharpest post-budget stock market plunge in the nation’s history, Daim should explain why his  K-economy Budget had failed to gain a market vote-of-confidence as reflected in a rebound in the KLCI - or whether he thinks that the stock market should not be used as a benchmark for the government’s  economic performance at all.


*Lim Kit Siang - DAP National Chairman