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TJ KB AIN: Ringgit Menjadi Tebusan Politik
By Asia Intelligence
7/4/2001 12:29 am Sat
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
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.
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.
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.
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 Jane Lee and J.S. Dhaliwall
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
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
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.
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
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
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
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
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
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
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
"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.
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
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
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
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%,
Markets in Hong Kong, Taiwan and South Korean were all closed
Thursday for public holidays.