An economist has dismissed fears about the impact of the Bersih 5 rally and 1Malaysia Development Bhd on the sentiment of foreign investors.
Professor Hoo Ke Ping said: “Foreign investors are not worried about 1MDB, (Prime Minister) Najib Razak or the Malaysian Offical Number 1. Why? Because that is an old and stale story. 1MDB has no relevance.”
Overseas news reports have linked today’s rally to the controversies surrounding 1MDB and its possible impact on foreign investment.
However, Hoo said the more worrying issue was the drastic fall in value of the ringgit in the past week on foreign exchange markets.
“The ringgit crashed almost 10 per cent and that’s not because of 1MDB,” he said. However, foreign investors holding as much as RM200 billion ringgit in government bonds may not want to renew their contracts, some of which had already matured.
Independent economist Azrul Azwar Ahmad Tajudin agreed that it was unfair to say with any certainty whether the Bersih 5 rally would have any effect on foreign investors.
He agreed that the ringgit’s fall was one of the main issues that may affect foreign investments. There were many factors for this downward trend, such as Donald Trump’s impending assumption of the US presidency having affected regional currencies.
But he said the controversies surrounding 1MDB might have also be a factor, being specific to Malaysia.
“What we can deduce is that Bersih 5 and its demands as well as other issues which are closely linked to this particular rally, including 1MDB, may play a role but it is not the only factor,” he said.
Source : Sheith Khidhir Bin Abu Bakar@FMT Reporters Online