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Monday, August 29, 2016

Our Capital Market (KLSE, Bond Market, Loans) Dropped 12 Places to 16 out of 20 !! Going down, down, down !


This is from Free Malaysia Today. My comments in blue.


Malaysia’s capital market ranking drops to 16 out of 20
M'sia’s capital market used to rank in top four in East Asia in mid-90s
Now, it is 16th out of 20 Asian countries
Indonesia overtaking us in July 2016

(I told you so. This happened after the mamak was put in charge. This is proof of incompetence. The country has been going down since the mamak appeared on the scene.)

Indonesia now darling of investors 
Malaysia taiko among poorer countries Vietnam, Cambodia and Myanmar.
in 90s M'sia’s capital market fourth after Japan, Taiwan and Hong Kong.




(Malaysia has gone from top four to bottom four. Indonesia has passed us. Next Vietnam, Cambodia and Myanmar may get past us. Papua New Guinea has beat our football team. Maybe Papua will pass our capital markets too. Can you hear the Dumbnos? They are saying, 'So what?', 'Who cares?') 
 


Hong Kong’s daily capital market volume is RM30b
Indonesia RM2 to RM3b daily 

Shanghai RM40 to RM50b daily.
M'sia’s daily volume is  RM1 to RM2b
 
  • expansion of Indon capital market policies due to Jokowi since 2014
  • Jokowi's tax amnesty to bring billions of dollars, no questions asked
  • 2nd measure to reduce corporate tax from 25% to 17% 
  • attracted foreign companies to invest 
  • This created jobs for people
  • Jokowi’s third step to attract USD1 trillion investment from Japanese 
  • these three measures, Indon capital market will grow 20% by end 2016 
  • a lot of cash in Indon market at the moment
M'sia’s corporate tax remains at 25%

( In Russia both corporate and personal income tax was set at 15%.  Indonesia's corporate tax is 17%.  This alone will pull significant investment to Indonesia instead of Malaysia. The Japanese are investing in Indonesia, most likely at our expense.
We should reduce our corporate and personal income taxes progressively. Since the gomen has already imposed the GST, they should reduce other taxes. Instead we still have 25% corporate taxes, income taxes and now GST. And the gomen is still going broke.)

need to have easier flow for ringgit trade, just like rupiah
M'sia currency restrictions on ringgit 
flow of currency restricted
a lot of red tape for foreigners 
crucial to allow easier flow of ringgit



size of capital market directly proportional to size of economy. 
US world’s largest economy, has largest and deepest capital market. 
capital markets move money to organisations which need it to be productive
critical for a smooth functioning modern economy.

(This is very true. The stock market captures the productivity of the people in a country. People who are productive generate surplus wealth which can then be invested in the efforts of other productive people to create more wealth. It is a virtuous cycle. 
 
The Malaysian capital market has gone from No. 4 in Asia to number 16 - out of 20. Our economic growth has also been shrinking. From 7% down to 6%, to 5% and now down to 4%. Granted the world economy goes through cycles but a sustained down trend like this is reflective of incompetent policy makers and incompetent gomen administrators. The mamak is at the top of all this incompetence.

Also, since they consolidated the banking industry, wiped out the finance companies, wiped out the credit and leasing companies, 'merged' more than 50 local banks to the less than 10 so called "mega banks' or "anchor banks" (a load of crap) it has wiped out easy access to credit (aka capital).  Which has given birth to the rise of the Ah Long industry, which will never go away now. Without easy access to capital, the long term economic growth has been hampered.

There has been gross incompetence in managing our economy for some time now, but it has accelerated over the past 13 years.

The management of our economy (and the country) has destroyed wealth creation opportunities steadily over time.  That is why now we are at no. 16 out of 20 - at the same level as Myanmar, Cambodia and Vietnam.  Thailand has long ago gone passed us. Indonesia has gone passed us too.  This is incredible stupidity.  Sadly, not many will even understand this.)