Malaysia Matters Podcast

Aiming to prop up some companies deemed undervalued, the government earlier this week announced that it would utilize the national pension fund as the source for a loan that would pump 5 billion ringgit ($2.1 billion) into the Malaysian stock market. This would double the resources available to ValueCap Sdn. Bhd, a state agency chartered to invest in the stock market. 

But critics argue that risking pension funds in the marketplace is unsound and that there is too great the potential for conflict of interest associated with companies well-connected to the government.

A call for greater transparency of Valuecap’s business practices was a concern raised by Lim Kit Siang, head of the opposition Democratic Action Party, who was reported to as saying that  ’Valuecap has operated in secrecy since it was set up in 2003 and that its accounts have not been audited.’

This are the people’s money. In order to ensure that this is not a bailout…there should be a public scrutiny’ of Valuecap’s accounts, he said.

Anwar rebuffed the plan saying that the impact would total 1% in market equity and no real effect. 

It ’serves no logical purpose other than to prop up some companies in the stock market,’ he told reporters in Parliament.