PETALING JAYA: Economy minister Rafizi Ramli said the local stock market must meet the expectations of international portfolio managers for better future returns if Bursa Malaysia is to regain its shine.
He said portfolio managers today are no longer just satisfied with a steady growth.
“Investors are looking for growth prospects with high economic content, mainly related to green, and energy transition projects. Hence, Bursa Malaysia needs to adapt to these kinds of projects, which promise more growth in the future.
“Therefore, what we have to manage is the amount of time taken for companies to pivot to these changes to become more attractive to international portfolio managers,” said Rafizi, responding to a question from FMT Business after officiating the rollout of a vending machine service at the University of Malaya Medical Centre in Kuala Lumpur today.
He noted that investing in equities is not about the past, but the future. “Although it is uncomfortable and a challenge for the government, yet it is necessary to push towards this structural reform,” he said, alluding to the pivot towards green-related energy projects.
He said companies “cannot run from these changes” as there is a need to reform the make-up of Malaysia’s economy to suit the current market trend.
“The economy must convey the promise of the future and not the successes of the past.”
Lagging far behind
FTSE Bursa Malaysia KLCI (FBM KLCI) is one of the worst performing benchmark indices in Asia, down almost 8% year-to-date.
Rafizi said recently the Malaysian stock market did not carry the same “lustre” as its counterparts in other countries.
He said the stocks that dominate Bursa Malaysia reflect the country’s past economic successes rather than a “promise of an exciting future” for investors.
Commenting on Rafizi’s statement about the local bourse losing its lustre, Bursa Malaysia CEO Muhamad Umar Swift highlighted last week the low profitability of Malaysian public-listed companies (PLCs).
“Malaysian corporations have not been that attractive from a profit perspective,” he pointed out.
The last time the FTSE Bursa Malaysia KLCI (FBM KLCI) was within touching distance of 1,900 points was five years ago.
Since then, it has tumbled 26.9% or 507 points to 1,380.61 points yesterday from its five-year high of 1887.75 in April 2018, just prior to the 14th general election.