Malaysia’s leader said his government would invest billions of dollars to boost financial markets and the economy and pledged transparency over a state-investment fund that the country’s anti-corruption agency is investigating.
Weak commodity prices and a slowing Chinese economy have battered Malaysian markets and added to pressure on Prime Minister Najib Razak, as protesters challenge his rule, NewsNow reported.
The prime minister said a state firm called ValueCap would invest 20 billion ringgit ($4.6 billion) in some of the country’s worst-hit stocks and he urged other quasi-independent state firms with overseas operations to cash in those investments and reinvest in Malaysia. Later in the day, the country’s main sovereign-wealth fund agreed to do so.
This wasn’t the first time Najib tried to leverage state muscle to boost the economy and markets.
In 2008, as deputy prime minister, he announced a government investment in Malaysian stocks through ValueCap and an economic stimulus package. The ValueCap investments, worth $1.2 billion, helped lift the local exchange out of a seven-month malaise. Also in 2008 he formed 1Malaysia Development Bhd, aimed at driving long-term economic development in the country. That fund is the one now being investigated.
In a speech on Monday, Najib said his government “remains committed to helping solve investigations in relation to the investments of 1MDB transparently.” He said all 1MDB’s dealings will be “transparent and market-friendly.”
Najib also said he would relax import duties on equipment not produced domestically but required by factories until the global economy recovers. He said that an estimated 900 manufacturing companies would enjoy annual savings of between 100,000 ringgit ($23,200) and 500,000 ringgit. He said other measures to help stimulate the economy will be announced “from time to time.”
The ringgit, Malaysia’s currency, has fallen 20% against the US dollar in the year-to-date to levels not seen since the 1997-98 Asian financial crisis and the country’s main stock index has lost nearly 9%.
