THE ringgit and stock market are both set for a rebound after posting losses following the change of government from last year’s general election, Nazir Razak, former chairman of CIMB, told Bloomberg.

Since May last year, Bursa Malaysia has dropped 11% while the ringgit lost 4.5%.

“Investors don’t like short-term uncertainties,” Nazir told Bloomberg Television on the sidelines on the Milken Institute global conference in Beverly Hills, California.

“After this first year, the reality is setting in, the government is reviewing right and wrong decisions, and I’m quite hopeful that maybe the worst is over.”

Nazir, who helmed the country’s second-largest bank for almost 30 years before stepping down last year, also said the ringgit is “oversold”, although Malaysia still needs the confidence of the rating agencies, along with sound decisions by the government for the currency to recover.

After Dr Mahathir Mohamad led Pakatan Harapan to victory last year, former prime minister Najib Razak, who is Nazir’s older brother, was charged with playing a role in the embezzlement of funds from state-owned 1Malaysia Development Bhd (1MDB).

The new government also put a halt to several large-scale development projects, leading to market uncertainty, as foreign investors pulled out while waiting for policies to be made clear.

After leaving CIMB, Nazir, 52, helped start private equity fund Ikhlas Capital with partners whom, he said, have a century of combined experience.

He started the fund because there’s a void in the private equity space in Southeast Asia, where the average annual deals are just starting to rise to the range of US$10 billion to US$12 billion, from US$4 billion to US$6 billion five years ago.

“It’s an industry that’s about to take off,” he told Bloomberg.

“Then you’ve got this frustration with public markets by a lot of entrepreneurs – they are not giving them the right valuations and there is a lot of compliance costs.”

Nazir’s partners at Ikhlas included Kenny Kim, who previously worked under him as chief financial officer of CIMB, and Gita Irawan Wirjawan, Indonesia’s former trade minister.

Former Philippine finance secretary Cesar Purisima and David Heng, who resigned from his role as a senior managing director at Singapore’s Temasek Holdings Pte in 2017, are also set to join the fund. – May 1, 2019.