Malaysia Cannot Stop Hedge Funds Speculation

Malaysia will not be able to stop hedge funds from indulging in currency and stock market speculation. According to Mohd Munir Majid, chairman, Securities Commission, Malaysia, there is a need to ensure discipline among fund managers who take investment decisions based on the redemption pressures.

Mohd Munir Majid highlighted the implications of the East Asian crisis and said the outlook for the Asian economic growth has deteriorated.

"Emerging stockmarkets had a bad year. The East Asian risk-return profile has deteriorated, the outlook for Asian economic growth has deteriorated with the International Monetary Fund estimates for December to May indicating a fall in growth rates for East Asia.

 

The cost of foreign capital has also increased," he said.

Majid added that the with the recent developments the stockmarkets have shown signs of recovery.

"Most markets have enjoyed largest daily gains with lunar new year rally on the back of a series of market and economic measures across the region.

Among the key events that moved the market sentiment down were rupiah collapses after the Indonesian budget announcements, the collapse of Peregrine and fall in US markets.

Events like the expectation of Japanese economic measures and intervention by the United States , International Monetary Fund officials in Indonesia boosted sentiments to some extent," he said.