By G. Sharmila
Tajuddin Atan
The ongoing issues at 1Malaysia Development Bhd (1MDB) have little effect on the Malaysian equities market’s integrity, Bursa Malaysia Bhd chief executive officer Tajuddin Atan suggests.
To a question today on the perception that 1MBD has affected the stock market performance of late, Tajuddin replied: “In the overall bigger scheme of things, the market is sizeable enough to move forward.”
“From the exchange perspective, we think that the performance of the market not only involves the domestic issues but also external issues,” he said, adding that the external factors have been considered more relevant in this area.
Citing the Greece situation as an example, he said that the concern has been about its contingent effect on Europe, that would have a spillover effect on the growth of Asean.
“From an aggregated perspective, combined with the fundamentals, it has not impacted the confidence on the integrity of the market,” he said.
When pressed to elaborate further on the 1MDB link to market performance, he highlighted that the exchange’s job is to maintain market integrity, as well as a fair and orderly market.
“So in the bigger scheme of things, it (1MDB) doesn’t (affect the market). If there is an issue, there will be an issue of transparency in that area in that space alone. And if I were to jump at those things, every other company that comes along, well, we couldn’t. We do market management and supervision, we are concerned with market integrity and a fair and orderly market,” he explained.
He did concede that market valuations are an issue at this point in time.
“Valuation is an issue of relativity, because at any point in time, people will have their own formulas or equations to indicate where the right level is to enter, to hold a portfolio or to come back. If you ask me, in a normal market over a long period of time, it will reach a price level discovery, as long as fundamentals remain,” he said.
Earlier, Tajuddin said that trading activity is expected to be challenging going forward as the FBM KLCI remains soft with pressure building up on the weakening of the ringgit and expectation of lower corporate earnings.
However, this will be cushioned by ample domestic liquidity, he added.
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