GEORGE TOWN: Bad news must be kept at bay, says an analyst, saying it was time Putrajaya rebuild confidence among investors against a backdrop of a possible US-China trade war that could hurt emerging economies such as Malaysia.
Hoo Ke Ping said while it was important to announce that the government was cleansing the system it inherited, Prime Minister Dr Mahathir Mohamad must immediately take on the role of the “salesman” to encourage foreign investors to stay on, while attracting more of them.
“Just keep the bad news and politicking to themselves for the time being,” Hoo told FMT, amid criticism that being “honest” about the critical state of the nation’s economy could backfire on the present government.
Hoo warned that investors would lose money and be forced to leave if they heard “only bad news”.
He said it was crucial for Malaysia to build a positive image right away to instill confidence among investors.
“And the right person for the job is Dr Mahathir. He ought to be a salesman, tell the world we have changed for the better. He must tell all that we are in good hands so that spooked investors can come back,” he added.
Hoo said Mahathir and top government officials should meet international credit rating agencies such as Moody’s and Standard & Poor’s so long-term relationships were established.
He said antagonising these agencies would be a mistake, as their views are trusted by investors.
“They are determinants of global fund flows. These are the friends we should be keeping close. The finance minister should be making friends with them, not challenging them,” he said, referring to Lim Guan Eng
Lim had drawn flak over several announcements on the state of the economy, with critics saying he had gone too far and could spook the financial and stock markets.
One of Lim’s critics was PPBM Supreme Council member A Kadir Jasin.
“He was too excited in discovering these facts that actually proved that PH had been right all along, but he forgot the implications of his revelations,” the former New Straits Times Press boss wrote last month.
“Political mileage is not the same as economic mileage and what is good for politics is not necessarily good for the economy and market,” he said.
Lim has since defended himself, saying he was being “honest” about the country’s economy, including when he said that Malaysia had a trillion dollar debt problem.
“How can that cause the fall? It may or may not be the reason. Whatever it is, it is up to the stock market to determine,” he had said.