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AWSJ: M'sia Scraps 10% Exit Tax On Gains for Foreign Investors
By Leslie Lopez
5/5/2001 8:39 pm Sat
[Saham BSKL melonjak sedikit berikutan pengumumnan penghapuran
10% cukai levi. Tetapi banyak analis berpendapat ia tidak akan
daat mengambil hati pelabur yang sudah jeran dengan cara Mahathir
menguruskan ekonomi. Ketidak-tentuan politik seperti hubungan
Daim-Mahathir turut menjadi faktor keresahan melabur di sini.
Diramalkan tektik levi, krisis Daim-Mahathir dan mungkin juga
keputusan pengunduran nama Mokhzani dari 2 syarikat koporat
baru-baru adalah untuk mengelakkan BSKL dari menjunam di bawah
paras 500 yang amat ditakuti.
Menurut satu kajian oleh International Institute for Management
Development di Switzerland, tahap kompetetif global Malaysia
kini telah jatuh keparas 29 dari tahap 14 pada tahun 1997.
Analis juga berpendapat dengan levi itu dihapuskan ia menunjukkan
petanda besar Mahathir akan terus mengekalkan kawalan matawangnya
sebagai perisai keunggulannya (yang sebenarnya tiada). Mungkinkah
ia satu perisai terakhir sebelum dia tersadai jua?
Malaysia Scraps 10% Exit Tax On Gains for Foreign Investors
KUALA LUMPUR, Malaysia -- Malaysia removed a 10% exit tax on
repatriated capital gains for foreign equity-market investors.
The move rescinded the last significant measure imposed on foreign
investors in the Kuala Lumpur stock market as part of Malaysia's
controversial capital-control policy announced in September 1998.
The government's decision appears to reflect Kuala Lumpur's concerns
about steady outflows of foreign portfolio funds and declining
foreign-exchange reserves amid speculation over a possible devaluation
of the ringgit, which is currently pegged at 3.80 to the dollar.
But many economists and investment analysts say the removal of the 10%
tax probably won't spark a sustained rush of investments into the
Malaysian market. They note that political jitters, particularly over
rumors of a rift between Prime Minister Mahathir Mohamad and Finance
Minister Daim Zainuddin -- who is on a two-month leave from his post
-- are likely to keep investors on edge. "The only upside here is that
it removes the threat of the stock exchange's index dropping below 500
points," said a Kuala Lumpur-based fund manager.
Manu Bhaskaran, chief economist at SG Securities in Singapore, said
corporate-governance and political issues will continue to cloud
Malaysia's economic outlook. But he added that the move to scrap the
exit tax illustrates an "encouraging pragmatic streak" in the
government and sends a strong signal that Malaysia plans to defend its
fixed exchange rate in the medium term.
"Winning confidence among foreign investors is a hard and long climb,"
said James Lau of SBB Securities Sdn. Bhd. "But this certainly removes
a major barrier."
In recent months, there has been widespread speculation that Malaysia
will be forced to repeg its currency against the dollar should
regional currencies weaken further and, in the process, erode the
competitiveness of Malaysian exports.
In a recent survey conducted by the Swiss-based business school
International Institute for Management Development that measured
global competitiveness, Malaysia slipped to the 29th spot, well below
the 14th-place ranking it held in 1997.
Mr. Bhaskaran and other economists say that by removing the exit tax,
Malaysia is attempting to show a more friendly face to foreign
investors. Combining the removal of the exit tax with the repegging of
its currency to a lower level won't be in Malaysia's interest, these
Malaysia imposed capital controls in September 1998 with restrictions
in the movement of funds held by foreigners as one of its key
features. Other key elements of the capital-control policy --
restrictions on the transfer of funds out of the country by Malaysians
or foreigners with external accounts and the ringgit peg -- remain in
"The abolishment of the levy today is the culmination of a series of
gradual steps toward full liberalization, which began in February
1999," the Finance Ministry said. The ministry said the move was
decided upon after discussions and consultations with local and
foreign fund managers, who found the tax to be cumbersome in terms of
Some analysts said the move is aimed at stemming the dwindling of
foreign reserves. "The government is beginning to react, with the hope
investor-friendly moves will attract new capital and reverse declining
foreign-exchange reserves," said Rajiv Malek senior economist at JP
Morgan Chase in Singapore.
In the first two weeks of April, Malaysia reported a net outflow of
portfolio funds amounting to $176 million.
Malaysia's international reserves stood at $26.3 billion as of April
14, down 3.3% from $27.2 billion at the end of March. Reserves peaked
at $34.5 billion in June 2000.
The central bank said the drop over the two-week period in April was
partly because of negative domestic market sentiment, which resulted
in "gross outflows."
Write to Leslie Lopez at firstname.lastname@example.org and Joseph Edwin at
Malaysia's Sharp Drop in Exports
By MONICA HOUSTON-WAESCH
KUALA LUMPUR, Malaysia -- Malaysia's March trade surplus of 4.2
billion ringgit ($1.11 billion) was smaller than most analysts had
expected, mostly because of a sharper-than-predicted decline in
exports. The national statistics agency released March trade data showing that
exports slumped 6.9% from the year-earlier period to 29.8 billion
ringgit, far more than the expected drop of up to 4%.
The national statistics agency released March trade data showing that exports slumped 6.9% from the year-earlier period to 29.8 billion ringgit, far more than the expected drop of up to 4%.
"The weakness will carry on -- we haven't seen the bottom yet," said
Rajiv Malik, senior economist at J.P. Morgan Chase & Co. "I don't
think we'll see bottom until around the third quarter."
Malaysia is expected to be hit hard by the global slowdown in demand
for electronic products, amid slower economic growth in the region and
the U.S. Such products usually make up more than half the country's
export revenue. In March, electrical and electronic goods accounted
for 56.2% of total exports.
However, imports of capital goods, those items used to produce other
goods, soared in March, gaining 29.5% to 4.5 billion ringgit,
signaling rising consumption despite the lower exports. Capital-goods
imports made up 17.6% of total imports.
Like most Asian countries, Malaysia's aggregate trade makes up more
than 80% of its gross domestic product.
Like most Asian countries, Malaysia's aggregate trade makes up more than 80% of its gross domestic product.
A local daily newspaper quoted central bank Governor Zeti Akhtar Aziz
as saying that economic growth would be about 5% this year, at the
lower end of the government's official forecast range. In the past,
Mr. Zeti had said growth would likely be around 6%.
Economists welcomed the increase in capital-goods imports as a sign of
increased investment activity. Sustained strength could indicate that
the economy is being weaned from its dependence upon export-led
growth, the economists said, but cautioned that it is too soon to
Analysts are sure to closely monitor the data to better assess whether
the sharp rise is due to one-time private investments or marks the
beginning of a trend.
"It could also be a reflection of foreign investment approvals last
year, which are beginning to trickle in," Mr. Malik said.
Approvals of foreign investment in the manufacturing sector last year
rose to a value of 19.8 billion ringgit from around 12.3 billion
ringgit in 1999.
For the full first quarter, Malaysia's trade surplus amounted to 13.6
billion ringgit, down 17.7% from the year-earlier period. Exports rose
2.0% to 86.4 billion ringgit, while import growth strengthened to 6.7%
to 72.8 billion ringgit.
Write to Monica Houston-Waesch at email@example.com