AMID FDI PLUNGE AS INVESTORS FLEE – BANK NEGARA ANNOUNCES FURTHER RELAXATION OF FOREX POLICY – WHILE TRADERS HOPE FOR ‘TECHNICAL REBOUND’ IN OVERSOLD SHARE MARKET

Bank Negara announces further relaxation of forex policy

KUALA LUMPUR: Bank Negara has announced five new measures to further liberalise the foreign exchange policy (FEP) to allow greater flexibility for businesses and to foster a conducive environment in attracting foreign direct investment (FDI) to Malaysia.

The central bank will be lifting the export conversion rule, which will allow resident exporters to manage their own export conversions according to their foreign exchange cash flow needs.

Secondly, exports will be allowed to settle domestic trade in foreign currency with other resident corporates operating in the global supply chain.

Exporters will also be allowed to net off export proceeds in its permitted foreign currency obligations as a move to enhance business efficiency and cash flow management for exporters.

This means that exporters no longer need to seek approval from Bank Negara for netting arrangements involving export proceeds.

Market oversold, technical rebound expected

PETALING JAYA: The local benchmark index has plunged to below 1,600 points, dragged down by glove stocks, in what observers called an oversold market.

The weakness in the local market was in line with its regional peers which also saw declines, largely due to the surge in US government bond yields and a strengthening US dollar.

This was prior to the announcement of the country’s multi-trillion-dollar stimulus plan.

Observers reckoned that the local stock market could be “oversold” and it is due for a “rebound” especially with economic recovery expected to pick up in the second half.

Rakuten Trade head of equity sales Vincent Lau expected the market to stage a rebound on positive news such as FTSE Russell removing Malaysia from a watch list of possible exclusions and expectations of a higher economic growth.

ANN

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