Malaysia is set to inject US$1.4 billion into its ailing stock market amid a worsening global financial crisis
KUALA LUMPUR (AFP) — Malaysia will inject 1.4 billion dollars into the ailing stock market and will cut its growth forecast for 2009 amid a worsening global financial crisis, the Finance Minister said Monday.
Najib Razak also said the government may review its 2008 and 2009 fiscal deficit forecast and scale back on infrastructure projects "with limited economic multiplier effect" for the year to cushion the impact of the economic crisis.
"Yes, our stock market is affected by the sentiments in other markets but I would like to stress that we are not in a financial crisis, and certainly we should not talk ourselves into one," Najib said in a speech at a conference in Kuala Lumpur.
He said the government will double the size of its state-run investment company Valuecap Sdn. Bhd, which was formed in 2003 to invest in under-valued, but fundamentally strong shares.
"Given the current opportunities for value investing, I would like to announce that the government will provide additional funds of 5 billion ringgit (1.4 billion dollars) to double the size of Valuecap to 10 billion ringgit," he said.
Kaladher Govindan, research head at local brokerage TA Securities said the move "is a positive boost for the stock market," which has dropped 37 percent this year.
Najib, who is set to take over as prime minister in March, said the downward revision of the 2009 growth forecast from 5.4 percent and details of the government's policy response will be announced in parliament on November 4.
