The Malaysian economy and the stock market should perform as well if not better than their regional counterparts which do not benefit from three “Viagra-type” boosts for their economy, but this is not the case when the KL stock market is compared to the other regional markets, whether Singapore, Bangkok, Seoul, Hong Kong or Tokyo.
The Kuala Lumpur stock exchange has been the worst performer in the Asian league of leading stock markets despite three economic "Viagra" jabs since the announcement of the RM3 billion economic stimulus package, as shown by the following indices on March 23 (the previous trading day before the announcement of the RM3 billion economic stimulus package) and the close of trading today (4th May 2001):
Tokyo Seoul HK Bangkok Singapore KL
23.3.01 13214.54 537.97 12583.36 290.25 1715.31 669.27
04.5.01 14421 585.60 13390 306.48 1714.84 576.99
Change +1206.46 +47.63 +806.64 +16.23 -0.47 -92.28
%change +9.13% +8.85%
That Malaysia suffered the worst stock market performance in the strong Asian economies despite two other boosts, the government’s abolishment of the 10% exit levy on profits repatriated within one year and the relaxation of the Foreign Investment Committee (FIC) rule to allow foreign citizens to buy all types of local property costing above RM250,000 without having to form a company with Malaysian equity participation, should highlight the gravity of the country’s confidence problem among both local and international investors.
Last week, Malaysia received the bad news that in its annual survey of global competitiveness, the World Competitiveness Yearbook (WCY) 2001 has ranked Malaysia has having fallen by four places, slipping to 29th position as compared to the 25th spot last year.
This “bad news” was blacked-out by the mainstream media and Malaysians cannot read about it in the New Straits Times, the Star, the Sun, the Utusan Malaysia and Berita Harian - a most peculiar way of their celebrating the World Press Freedom Day 2001 yesterday.
If Malaysia had improved its ranking even by one place in the annual survey of global competitiveness, the news would have been trumpeted on television, radio and the front pages of the mainstream media and Malaysians will not be allowed to miss it.
There is no doubt that the Kuala Lumpur stock market is still worse-off than other regional markets despite three “Viagra” injections because the very deep-rooted problem of confidence which Malaysia suffers from are in the final analysis not so much economic or financial but political - and unless the government has the political will to bring about far-reaching political, economic and nation-building reforms, Malaysia is unlikely to resolve the confidence problem and the Malaysian economy cannot be restored to its optimum level.