THIS year will be a challenging one for Malaysia’s economy due to the US-China trade war, geopolitical concerns in the Middle East, global monetary tightening and swings in oil prices, said Finance Minister Lim Guan Eng.

He said the Malaysian economy, especially the stock market, will not be spared the repercussions caused by events outside the country.

But he is optimistic that the nation’s economy will remain on a steady growth path, supported by domestic and external demand.

“Despite a turbulent year, our stock market has remained resilient in comparison to our peers in Singapore, Thailand, Hong Kong, and China.

“Amid large capital outflows among emerging markets and Asean countries this year, the FBM KLCI benchmark index registered a year-to-date (YTD) decline of 5.8% as at end-November, compared to other Asian markets that have experienced declines ranging from 9.1% to 22.7%,” he said in his keynote address at the MarketPlace @ Penang Fair 2019 in George Town today.

He said Malaysia was the second-best performing stock market in the Asia Pacific region.

Lim said on the back of a challenging environment for global equity markets, facing external headwinds, such as the ongoing US-China trade war, geopolitical concerns in the Middle East, global monetary tightening and swings in oil prices, trading activities in the local stock market remained robust with an average daily value trade of close to RM2.5 billion as at end-November 2018.

“This is still an improvement from last year’s RM2.3 billion, which indicates that general interest remains intact as investors take opportunities on the market volatilities.”

Lim said if there is a resolution to the US-China trade war, there is a high possibility that the stock market will rise as it is determined primarily by external factors.

He said the government has introduced various policies and measures to invigorate the capital market. 

“For example, the waiver for stamp duty for trading in Exchange-Traded Funds, SWs (Structured Warrants), stocks of mid- and small-cap companies was introduced to encourage greater investor participation in this segment of the market,” he said.

Lim said it is crucial for Malaysians to step up on their financial literacy and increase their efforts to learn smart ways to manage their finances, particularly investing in a regulated environment instead of falling victim to get-rich-quick schemes or fraudulent companies and investment scams.

“Financial literacy among Malaysians is still seriously lacking, where people generally are not informed of its importance and the impact it has on a person’s future and lifestyle.” – Bernama, January 5, 2019.