‘AMPLE LIQUIDITY IN CAPITAL MARKET’
RM4.86b buffer against foreign selloff year-to-date, says SC chairman
THERE is ample liquidity in Malaysia’s capital market to buffer foreign selloff activity, which stands at RM4.86 billion year-todate.
Securities Commission (SC) chairman Datuk Syed Zaid Albar said Malaysia had strong macroeconomic fundamentals backed by well-poised stockbrokers and intermediaries.
“This is what we try to improve
on discipline and allow more liberties to make the market resilient,” he said at launch of the first joint-research — “The Evolving Business of Asset Management: Malaysia’s Perspective” — by the Institute for Capital Market Research and Japan’s Nomura Institute of Capital Markets Research.
In relation to licensed capital market intermediaries, SC said their compliance with financial requirements remained relatively strong as a high percentage them are well-capitalised with sufficient liquidity, while clients’ margin exposures are wellmanaged.
Syed Zaid said the regulator operated in a fair and orderly manner with strong governance to drive and support a market-friendly and vibrant capital market.
The Malaysian capital market continues to provide an avenue for mobilisation and utilisation of long-term funds for development.
Syed Zaid expected the United States-China trade tension to continue, and expressed uncertainty on the outcome.
“There is an indication that it may not be ending soon.”
Yesterday, the the US Federal Reserve’s (Fed) Federal Open Market Committee (FOMC) hinted that the Fed would likely cut its interest rate.
Market analysts said the interest rate cut would reduce loan repayments for companies with US-denominated debts while prompting investors to shift their investments to other emerging markets.
The SC is confident that the local equity market will remain resilient despite uncertainty in emerging markets over global economic growth sustainability.
Local corporate investments would still be a good strategy for investors as they offer strong valuation in terms of earnings, added Syed Zaid.