KUALA LUMPUR: The proposed new taxes and the cancellation of mega projects did not play a role behind the RM1.05 billion foreign capital outflow from Malaysia last week.
Finance Minister Lim Guan Eng attributed the outflow to general global market weakness caused by external factors like the strengthening of the United States dollar and rise in US Treasury 10-year bond yield by over three percent.
He said other factors included trade tension between the US and China that is becoming evident on the republic’s economy and the uncertainties of the European market following Italy’s budget deficit plans.
“Brexit negotiations between the United Kingdom and EU also caused uncertainties in the region.
“Pressures on the crude oil market due to diplomatic tensions between Saudi Arabia and the US also cannot be discounted,” he said at the Dewan Rakyat today.
He said this to a supplementary question from Datuk Seri Ahmad Maslan (BN Umno-Pontian), who sought clarification over the cause of the foreign capital outflow from Bursa Malaysia last week.
Lim pointed out that the capital outflow of USD253 million (RM1,05 billion) from Malaysia as of Oct 13 was among the lowest in the region compared to Thailand at USD701.7 million (RM2.9 billion) and Indonesia (USD273.53 million or RM1.13 billion).
He said this indicated investors’ confidence in Malaysia and the country’s resilience in facing external economic challenges.
On Ahmad’s supplementary question if internal factors like the cancellation of mega projects and proposed new taxes played a role in the capital outflow, Lim said they did not.