Foreign selldown not due to MRT2 underground contract termination, says Guan Eng

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KUALA LUMPUR (Oct 18): Selldown on the Malaysian equity market last week was not due to the termination of Mass Rapid Transit Line 2 (MRT2) underground work contract with MMC Gamuda KVMRT (T) Sdn Bhd, Finance Minister Lim Guan Eng opined.

During Minister Question Time at Dewan Rakyat today, Lim also said the government will meet rating agencies after presenting the Budget 2019, to promote the Malaysian equity market.

"The selldown by foreign investors last week was not because of one or two companies or one or two projects, that couldn't be an effect so huge. We all know that global equity markets are affected by the trade war between the US and China and other external factors," he said.

"Usually Malaysia is being categorised into the same basket as our regional peers, so I suggest that we go to all major rating agencies, after Budget, to clarify with them about the situation in Malaysia, promote the domestic equity market and hope it will be more liquid in future," he added.

Lim was responding to Pontian member of Parliament (MP) Datuk Seri Ahmad Maslan, who asked the Ministry of Finance to state the reason foreign investors sold RM1.05 billion shares in Bursa Malaysia as reported by the media.

Lim was also addressing Jeli MP's follow-up question on what are the steps by the government to promote Malaysia's equity market.

Earlier this week (Oct 16), The Edge Financial Daily quoted MIDF Research's Adam M Rahim as saying foreign funds withdrew RM1.05 billion from local equity at Bursa last week, compared to a net inflow of RM69 million the prior week.

Adam said this was the largest weekly foreign net outflow in 16 weeks.

Nevertheless, he said Malaysia saw the second lowest level of foreign attrition last week among the four ASEAN markets he monitors.