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Malaysia's capital market grew 9% to RM3.1tril in first half of 2017

July 25, 2017 6:58 AM
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KUALA LUMPUR: Malaysia's capital market increased 9% to RM3.1 trillion in the first six months of this year and is now ranked fifth in Asia, relative to the gross domestic product (GDP), Prime Minster Datuk Seri Najib Tun Razak said.

He said Malaysia is also home to the largest number of listed companies in Asean and at US$29 billion, Bursa Malaysia also recorded the highest in funds raised in the last five years among the 10-member regional bloc.

"All this can point to only one conclusion: namely, our economy continues to prosper and we are stronger than ever as a result of the reforms and programmes the Government has put in place," he said in his keynote address at Invest Malaysia 2017 in Kuala Lumpur on Tuesday.

He said that as the business community and companies like strength and stability, they want the certainty provided by a Government that understands the prosperity of its people, is best served by being business-friendly and that sovereignty is not compromised by foreign direct investments.

"The business community wants the certainty of knowing the government is committed to the necessary reforms and to fostering a culture of entrepreneurship, transparency, accountability, and good regulations," he added.

He said among the major investments pledged by foreign companies in Malaysia include China's Huawei, which is making the country its global operations headquarters, data hosting and global training centre, at a project cost of RM2.2 billion, while employing more than 2,370 people.

He also said another significant investment is Saudi Aramco which is investing US$7 billion -– the company's biggest downstream investment outside Saudi Arabia - for a 50% stake in the Petronas Refinery and Petrochemical Integrated Development in Johor.

“That is the single largest investment in Malaysia, and shows the confidence Saudi Arabia has in our people, our technology, and ability to be a strong partner with their most important business,” he added.

Apart from that, Najib said London-based HSBC is investing over RM1 billion to build its future regional headquarters at the Tun Razak Exchange, recognising Malaysia's increasing status as an international financial and business centre.

Another company, Broadcom Ltd, one of the world's largest semiconductor entities with a market capitalisation of nearly half a trillion dollars, is transferring its global distribution hub that will manage the group's global inventory of RM64 billion annually to Malaysia from Singapore this year.

Najib said the Government since 2010 had introduced a New Economic Model designed to transform Malaysia into a high income nation and make the country into a more inclusive, equitable and sustainable society, with no one left behind, and opportunities made available for all.

“This is alongside the right fundamentals put in place to secure a stable and successful future.

“We have a plan of reform and economic transformation, while taking tough but responsible choices. It is clear today, that, aided by the hard work of millions of Malaysians, the plan has worked and is continuing to work,” he added.

He said between 2009 and 2016, the gross national income (GNI) increased by nearly 50%, and GNI per capita using the Atlas method, increased to US$9,850.

“Based on the World Bank's latest high income threshold of US$12,235, we have narrowed the gap towards the high income target from 33% to 19%,” he said, adding that 2.26 million jobs had also been created.

He noted that Malaysia's growth had been the envy of the advanced economies, even during years of turmoil for the global economy, while the World Bank had upped its own estimate for the country this year.

“We are expected to record a rise in GDP of 4.9%, considerably higher than the IMF's earlier prediction of 4.3%,” he said.

He said other rating agencies have also increased their predictions with Morgan Stanley now projecting 5% and Nomura forecasting Malaysia's economy to grow by 5.3% this year.

“Growth is expected to be higher next year. So we are on the right trajectory,” Najib added.

He said other sets of figures supporting confidence in Malaysia include trade in the first quarter increasing by 24.3% to RM430.5 billion compared to the same period last year, with exports breaching the RM80 billion mark for the first time in March.

“At RM82.63 billion, it is the highest monthly figure for Malaysian exports ever recorded. Apart from that, the ringgit has also has been described by Bloomberg as ‘easily the strongest major Asian currency this quarter', climbing twice as much as the next best, the Chinese yuan,” he added.

Najib said the Organisation for Economic Co-operation and Development's (OECD) most recent economic assessment of Malaysia described it as one of the most successful South-East Asian economies, thanks to sound macroeconomic fundamentals and the country's success in transforming the economy into a well-diversified and inclusive one.

He said the IMF, on the other hand, reported that the resilience of Malaysia's economy was due to sound macroeconomic policy responses in the face of significant headwinds and risks.

“And these sound policies are the reason why they said that Malaysia is among the fastest growing economies among peers,” he added.

Meanwhile, Najib said the World Bank in its latest report, issued just last month, said the Government's macroeconomic management has been constantly proactive and effective in navigating near-term challenges in the economic environment.


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