Kuala Lumpur: Despite the downgrading of Malaysia’s sovereign debt rating by Fitch Rating, there was no “knee-jerk” reaction from the stock market, says Tengku Datuk Seri Zafrul Tengku Abdul Azizi (pic).
“There has been no knee-jerk reaction from the stock market since the announcement.
“In this respect, the FBM KLCI and ringgit remained stable. we recorded a high bid-to-cover ratio demand of 2.6 times above the value of government MGII 10-year bonds offered last week the finance minister said Tuesday in response to a query from Lim Guan Eng in Parliament (Dec 15).
He noted that investor trust in Malaysia remained positive. Some fo the country venture capital fund managers had agreed to invest RM1.57bil in Malaysian start-up companies. For example, U.S., South Korean, Chinese, Indonesian and Singapore.
“He also said that the downgrade of the A- to BBB+ Fitch Rating to the sovereign rating of Malaysia. It was also combined with an improved outlook from “negative” to “stable”.
Zafrul also told lawmakers that since early March this year, most global rating agencies have given some 220 negative scores.
“This includes downgrading ratings for over 100 countries which includes the United Kingdom, Hong Kong, Chile and Laos,” he added.
Although the rating in Malaysia did not go against the trend in global ratings. Zafrul said he had expressed his position on the downgrade.
He added that the successful implementation of the economic recovery and stimulus packages will not be taken into account.
Zafrul said that the gross domestic product of the nation had shrunk in the third quarter at a slower rate of 2.7% compared to 17.1% in the previous quarter, the best in the Asean region.
Unemployment Rate 5.3% to 4.7%
He added that through the Wage Subsidy Scheme, some 2.8 million workers maintained their jobs. It helped reduce the unemployment rate from 5.3% in May to 4.7% in October.
He said that the University of Johns Hopkins had also noted that one of the lowest global Covid-19 mortality rates was achieved by Malaysia.
Zafrul claimed that such appointments were made on the basis of credentials, experience and expertise in compliance with the policy under the Malaysian Code of Corporate Governance on the political appointments of directors in government-linked companies (GLC).
Based on the company’s position, he also claimed that Bursa Malaysia, Bank Negara, the Malaysian Anti-Corruption Board, the police and others must also be screened for political appointments.
He told the House that while enhancing good governance, the government remained committed to strengthening the economy.
This involves the introduction of a Fiscal Responsibility Bill to ensure better fiscal governance and accountability, he said.
The former finance minister, Lim, had asked what the government was doing to fix both the recent downgrade of Fitch Ratings and the question of political appointments to GLCs.