Malaysia to pump in $4.6bn to bolster stock market
KUALA LUMPUR – Malaysia will inject up to $4.6 billion to bolster its stock market and will spend tens of millions of dollars on infrastructure projects to try to stimulate the slowing economy, Prime Minister Najib Razak said on Monday.
Najib, who is also finance minister, said up to 20 billion ringgit ($4.6 billion) would be used to reactivate the dormant equity investment firm ValueCap, which was set up in 2002 to invest in undervalued local firms. The country has seen a 9.0 per cent plunge in its stock market this year. But Najib’s announcement saw the index record its biggest advance in over two years, surging 2.3 percent at the close.
Malaysia’s economy grew at its slowest pace in nearly two years in the second quarter, amid a plummeting currency and political turmoil. Najib said the ringgit had declined 26.3 per cent against the dollar compared to a year earlier. Allegations of financial impropriety involving Najib, which he strongly denies, have become the biggest crisis of his six-year tenure.
They centre on claims that hundreds of millions of dollars went missing in deals involving state-owned investment company 1Malaysia Development Berhad (1MDB), which he launched in 2009.