RINGGIT MENJADI TEBUSAN POLITIK

Perkembangan: Tekanan semakin mencekik Malaysia untuk menilai semula kadar ringgit berikutan kejatuhan 6% BSKL pada Rabu lepas dan keputusan S&P untuk menurunkan lagi pangkat pencapaian kepada Malaysia.

Penilaian: Kadar ringgit - 3.8 untuk setiap dolar amerika - adalah simbol idosinkratik polisi ekonomi dan keengganan Mahathir untuk menerima pakej bantuan Barat yang ditawarkan ketika krisis kewangan 1997-98. Nasib matawang itu bergantung kepada kepentingan politik dan perkembangan ekonomi. Matawang serantau kini kian merosot kerana terheret oleh kejatuhan yen Jepun - ini menyebabkan ringgit lebih mahal dan mula mencederakan ekspot negara disaat Malaysia bergantung harap dan amat memerlukannya. Malangnya kerajaan masih berdegil untuk bertahan walaupun banyak kilang kini tergugat sehingga mula membuang ribuan pekerja.

RINGGIT TERLALU TINGGI - PENIAGA CINA SUSAH HATI

Tetapi data ekonomi yang terpapar kini mungkin membuatkan Mahathir mengalah juga. Indeks BSKL telah jatuh berdepap kepada rekod terendah 2 tahun sudah, satu kemerosotan sebanyak 15% sejak tahun ini sahaja. Kini S&P pula telah menurunkan sedikit markah buat Malaysia kerana kurang yakin ia mampu mengawal defisit yang meningkat.

Pada Rabu lepas sekumpulan peniaga Cina telah menemui pihak kerajaan dengan satu cadangan agar kadar ringgit diubah kepada 'tahap merangkak' sebagai alternatif kepada 'kadar berubah atau terapong'. Tetapi Mahathir mengatakan kadar ringgit tidak akan diubah walaupun sokongan terhadap partinya sudah merosot.

BSKL MEROSOT DILANGGAR KHABAR ANGIN

Banyak khabar angin bertiup ringgit akan dinilai semula sehingga meragam teruk indeks BSKL dibuatnya. Mahathir begitu berdegil mengenakan kawalan matawang dan kini dia semakin terjerat dan tertekan. Rezab asing negara juga sudah merosot sebanyak $2 bilion dari tempoh Dec 1999 - Feb 2001.

Rizab asing di Malaysia susut kepada tahap terendah 2 tahun sudah sebanyak $28.7 billion pada Mac 15. Bank Negara meramalkan rezab terkini akan jatuh kepada kadar 4.5 bulan daripada takungan impot pada tahun 2000, berbanding 5.9 bulan pada 1999 dan 5.7 bulan pada 1998.

KOMEN

Pendeknya formula Mahathir sedang teruji dengan hebatnya. Dia mengenakan kawalan matawang dan faedah yang rendah agar kroni tidak terbeban membayar hutang kepada pemiutang luar sehingga tertanggal seluar. Tetapi ringgit yang tinggi menyebabkan barangan ekspot semakin tidak kompetetif sehingga tergugat kilang tempatan dan ribuan pekerja terpaksa dibuang.

Pelabur asing sudah banyak yang keluar kerana lebih banyak faedah di negara luar. Malah ramai orang kaya Umno sendiri menyimpan di luar kerana faedah menyimpan lebih besar.

Nanti kita bakal ketahui siapa yang lebih dilindungi dan disayanginya - beberapa kroninya yang banyak berhutang atau ribuan rakyat yang miskin tetapi banyak menyumbang kepada ekspot di sektor perkilangan.

Ekspot dan takungan dana negara kini sudah semakin merosot. Jika angka itu menghampiri sifar, ramai yang akan menggelepar. Malangnya ramai yang tidak sedar walaupun tandanya sudah banyak yang tersiar.

-TJr Kapal Berita-

http://www.asiaint.com/#aib2

Malaysian ringgit becomes political hostage

Development: Pressure is growing on Malaysia to devalue the ringgit following a six percent fall in the Kuala Lumpur stock market on Wednesday, and Standard and Poor's decision on Thursday to lower its outlook for Malaysia's long-term foreign currency rating.

Assessment: The ringgit peg - 3.8 to the dollar - is the symbol of Malaysia's idiosyncratic economic policy, and of Prime Minister Mahathir Mohamad's resistance to the Western aid packages that were offered following the Asian financial crisis of 1997-98. Thus the future of the currency relies on political considerations as well as economic events. As currencies are weakening in the region, pulled down by the falling Japanese yen, the relative expense of the ringgit is starting to harm exports, but the government has not been willing to yield to economic considerations.

Other economic data suggests Mahathir might have to back down. The stock market is now at a two-year low, having fallen by 15% since the start of the year. Standard and Poor's decision to downgrade its outlook on Malaysia's long-term foreign currency ratings to "stable" was based on a widening fiscal deficit, set to hit 6.0% of GDP this year - up from an earlier estimate of 4.7%. A $789m fiscal stimulus package is mainly responsible, but added concerns come from questionable government bailouts increasing its liabilities. International currency reserves have also fallen, totalling $29bn at the end of February compared to $31bn at the end of 1999

On Wednesday a Chinese business group approached the government with a proposal to move the ringgit to a "crawling peg", thought of as a politically acceptable alternative to a floating system. Mahathir said there was no need for a change, and with falling support for his political party (see the 4 April AsiaInt Daily Briefing) he will not want to abandon his symbolic currency policy.

Thu, 05 Apr 2001, 03:41pm HKT

Malaysia's Credit Rating Outlook Is Cut to 'Stable' From 'Positive'

by S&P

By Jane Lee and J.S. Dhaliwall

Kuala Lumpur, April 5 (Bloomberg) -- Malaysia's credit rating outlook was cut by Standard & Poor's Corp. on concern its foreign reserves are shrinking and the government hasn't done enough to reduce its budget deficit.

S&P cut the ratings outlook to ``stable'' from ``positive,'' while maintaining Malaysia's long-term foreign currency rating at ``BBB.'' The last time S&P reduced the country's credit rating was in September 1998.

The revised outlook may make it more difficult to raise money through debt sales, and comes as the country says it will spend an extra 3 billion ringgit ($789 million) to build schools and houses and boost domestic consumption in a bid to stimulate the economy as global growth slows. The government said it may sell international bonds to raise the money.

``The cut in the outlook isn't helping matters as it will make it more expensive for Malaysia to raise funds on the international market,'' said Chan Yaw Pang, a fund manager at Commerce Asset Fund Managers Sdn.

The government is counting on the increased spending to spur economic growth and make up for any slowdown in demand for its electronic components such as disk drives, semiconductors and personal computers. Malaysia forecasts that its economy would grow at a slower rate of between 5 percent and 6 percent this year, compared with 8.5 percent in 2000.

The additional spending for 2001 will raise the deficit ``but we are doing it to tackle our own situation to sustain growth, '' said Chan Kong Choy, deputy finance minister.

Malaysia's foreign reserves fell to a two-year low of $28.7 billion on March 15. The central bank estimated that its reserves fell to an equivalent of 4.5 months' of retained imports in 2000, from 5.9 months in 1999 and 5.7 months in 1998.

Politics

The outlook was also partly cut because of growing ``political uncertainty'' in Malaysia as Prime Minister Mahathir Mohamad's control is eroded, S&P said.

Last year, the ruling coalition led by Mahathir lost its two- thirds majority in Kedah, Mahathir's home state. The 75-year old leader sacked his deputy, Anwar Ibrahim, in September 1998, leading to some members of the United Malays National Organization party splitting to form an opposition party, Parti Keadilan Nasional.

``Greater political uncertainty and modest slippage in a still strong external position, because of an unexpected decline in reserves, also restrain improvements in creditworthiness,'' S&P said.

Following the downgrade, S&P cut the outlook on the foreign currency ratings of state oil company Petroliam Nasional Bhd. and Telekom Malaysia Bhd., the biggest phone company in the country, to ``stable'' from ``positive.''

The benchmark Kuala Lumpur Composite Index fell 11.46 points, or 1.9 percent, to a two-year low of 582.80.

The Business Times, Singapore
5th April 2001

KLSE battered by ringgit devaluation fears

Speculation on likely re-pegging grows, despite repeated denials by Dr M

By Eddie Toh in Kuala Lumpur

THE Malaysian stock market took a severe beating yesterday on renewed fears the government would devalue the ringgit, even though Prime Minister Mahathir Mohamad has assured repeatedly that it would not happen.

Concern that a devaluation is imminent has been growing as the country's reserves fall and regional currencies weaken.

Such was the belief that the Kuala Lumpur Stock Exchange Composite Index (KLCI) yesterday tumbled 38.91 points or a hefty 6.1 per cent to 594.26 points.

Analysts said the benchmark index would fall way below 500 points if three major stocks -- Tenaga Nasional, Telekom Malaysia and Maybank -- were stripped out of the KLCI.

Traders said state funds had tried to support the three key stocks yesterday but to no avail. Tenaga slumped RM1.40 to RM9.90, Telekom fell RM1.25 to RM9.85, while Maybank tumbled RM1.30 to RM10.80.

Capitalisation of the Kuala Lumpur Stock Exchange, once the largest bourse in South-east Asia, yesterday fell below the RM400 billion (S$191 billion) mark for the first time in two years, to RM384.5 billion.

Although economic fundamentals are much better now than during the severe recession in 1998, the Malaysian market is not too far from its lowest level in the last decade. The KLCI touched 263 points in Sept 1998, when the market was capitalised at less than RM300 billion.

Analysts blamed the latest selldown on growing expectations the government would devalue the ringgit, which has remained at RM3.80 against the greenback since the imposition of capital controls in September 1998.

There has been persistent speculation that the government will have no choice but to re-peg the ringgit due to its falling reserves and the weakening of regional currencies.

Government officials, including Dr Mahathir, have repeatedly shrugged off such a possibility, saying the government needs to ensure a fixed currency regime to help provide stability for the business community.

However, some analysts felt the ringgit, which is seen to be overvalued against other currencies in the region, may make Malaysian goods less competitive.

The Malaysian market has also been mauled by the continued slide of equity prices in the United States and uncertainties clouding the world's largest economy.

Malaysia, which counts on the US as the biggest buyer of its chips and other electronic components, has been forced to come up with a fiscal package to counter the effects of the slowing US economy.

With the fiscal boost and the continued loose monetary policy, the central bank has projected a growth rate of 6% this year -- lower than last year's 8.5%. Economists said Malaysia will miss the growth target in the event of a US recession and further falls in KL stock prices.

Apart from assuming US growth of up to 2.5 per cent this year, Bank Negara is banking on 7 per cent growth in private consumption. An economist said private consumption will be stifled by the stockmarket slump.

Investors are also unnerved by the slow pace of corporate restructuring Even Bank Negara acknowledged that corporate developments have been dampened by the market since the second half of last year despite ample liquidity and a low interest rate and inflation environment.

"This development was mainly a result of the contagion effects from major regional and US stock markets and shifts in international capital flows, along with concerns over developments in the local corporate sector," Bank Negara said in its annual report last month.

http://business-times.asia1.com.sg

http://www.bizedge.com.my/page.cfm?name=edgebriefing

Malaysian Market Slips Amid Ringgit Peg Concerns, But Ends Well Off Lows

Malaysian stocks lost ground again Thursday, although a late afternoon rally saved the market from a third consecutive day of heavy losses. Investors continued to sell big-cap index stocks amid concerns that the government may not be able to maintain the ringgit's peg to the dollar.

At the close of trading, the Kuala Lumpur Composite Index had slipped 0.3% to 592.27, with 159.8 million shares changing hands. In a possible sign of broad-based bargain hunting, advancing issues edged out decliners by 334-to-311 for the first time this week.

Index heavyweights Telekom Malaysia and Malayan Banking paced decliners, though heavy buying of the two counters emerged an hour before the closing bell, helping the KLCI battle back from an intraday low, of 574.92, not seen since April 1999. Tenaga Nasional, down most of the session, surged 70 sen in late trading to finish up 0.5% to RM9.95.

Together the trio account for 40% of the key index.

Late-day buying sprees have become a hot topic recently, with securities regulators reportedly questioning brokers about claims they may have used inside information to profit from eleventh hour rallies aimed at propping up the market.

Still, prices have fallen near historic lows for many companies and bargain hunting also appeared to have contributed to the market's late recovery. Genting, for example, rose 1.7% to RM8.75, after plummeting 6% the day before.

Such underlying support was notably absent Wednesday, when aggressive selling in the three top index stocks drove the KLCI down over 6%, with 421 stocks hitting 12-month lows.

The free-fall Wednesday started after heavy foreign selling went unchallenged by government-linked pension funds, which have been known to step in to buy blue-chip counters to stabilize the market.

On Thursday market watchers said foreign investors continued to exit their positions amid heightened talk that the ringgit might have to be devalued. A weakening of regional currencies, which makes Malaysian exports more expensive in the eyes of importers, coupled with a steady depletion of foreign reserves are seen as putting a serious strain on the RM3.80-peg to the dollar.

Brushing aside government assurances that the peg will hold, foreign investors are selling because a weaker ringgit would cut into the value of their Malaysian holdings in dollar terms, observers say.

Reflecting that concern, international ratings' agency Standard & Poor's moved to revise its foreign currnecy outlook for Malaysia down a notch to stable from positive.

Among other companies Thursday, British American Tobacco, a favorite of foreign investors, fell 1.4% to RM35.00. Commerce Asset Holdings, meanwhile, declined 1.8% to RM5.35 on volume of 3.6 million shares amid news that a big U.S. fund management company, the Capital Group Companies Inc., said it had sold almost 1.2 million shares in the banking concern since March 30. Shares of Commerce fell 12% the session before.

Another banking concern, AMMB Holdings, lost 0.7% to RM2.69.

Despite the continued retreat on the U.S.'s tech-heavy Nasdaq Composite overnight, some local tech companies bounced back Thursday. Chip assemblers Malaysian Pacific Industries and Unisem gained 4.0% and 6.2%, respectively, after plunging over the past few sessions.

In neighbouring Singapore, the Straits Times index ended the session 3.4% higher at 1,676.88. Buying in blue-chips like Singapore Telecommunications, Singapore Press Holdings and Pacific Century Regional Development led the rise.

Bargain hunters came out in force, snapping up technology shares that have been taking a beating lately. Among tech sector stocks that rose Thursday were Creative Technology, up 3.4%, Omni Industries, up 6.0%, Venture Manufacturing, up 5.4%, and Datacraft, up 7.5%. Chartered Semiconductor Manufacturing, the world's third-biggest chipmaker, jumped 8.7% to S$4.26, recovering from a record low set the day before.

In Tokyo, the benchmark Nikkei index gained 1.1% to close at 13,381.38. Investors bought stocks in anticipation that an emergency economic package to be unveiled Friday will boost equity markets and help clean up the mountain of bad debts banks are holding.

Indonesia's key index lost 1.3%, while markets in the Philippines and Thailand tacked on 0.6% and 1.0%, respectively.

Markets in Hong Kong, Taiwan and South Korean were all closed Thursday for public holidays.