IT is a case of damned if he does not speak out and damned after he has spoken.

Not speaking out on national scandals would incur the wrath of millions who voted for change. But two former finance ministers, joined by minions, have advised Finance Minister Lim Guan Eng to refrain from exposing scandals so as not to alarm foreign investors.

Anwar Ibrahim advised on striking a balance between exposing financial scandals and inspiring confidence among investors. Tengku Razaleigh Hamzah said Lim’s statements caused a run in the stock market.

Superficially, Anwar’s advice is fair. But it can also be argued that laying open the actual financial status and exposing corruptions will send a clear message to investors that we’re starting with a clean slate, thus inspiring confidence.

It also depends on who the investors are. Those with intent to come in with their capital for the long term would surely prefer an open and honest government.

Contractors prefer to know what to expect when bidding for projects, not surprises. For those investors in the stock market, they are more speculators than investors.

Foreign funds take advantage of election fever, interest rate, fear factor, trade war and sanctions, and international geopolitical situation. These have nothing to do with whether Lim is telling the truth or lying. Investors in stocks are predatory in nature.

Tengku Razaleigh seems to be more concerned about inflammatory effect on Bursa Malaysia than revelation of scandals.

Both former finance ministers have implied naiveté on the part of Lim for aggregating the national debt to more than RM1 trillion and, therefore, causing a loss in investor confidence. News reports have been harping on the seven-week sell-off reflected in the KLCI, and EPF’s paper losses of RM6.09 billion in the duration.

In most previous general elections, the months preceding the elections saw a steady rise in the KLCI, and a subsequent sell-off after that. GE14 was no exception. On December 20, 2017, the FTSE Bursa Malaysia KLCI recorded 1,746.63 points.

It peaked on April 19 at 1,895.18 and remained at 1,853.58 by May 21, almost two weeks after the elections. Thereafter, our bourse in sync with all other countries, declined to 1,709.75 on June 20.

Arguments against Lim’s outburst have little merits. Sell-off of stocks has been a global phenomenon in the last seven weeks.

Bourses in the US, Europe, Japan, Hong Kong and Southeast Asia were all hit. The Federal Reserve raised interest rates last week by 25 basis points. Any rise of interest rate is normally adversary to the stock market.

The trade war between the US and China is another factor for the global market dive. The second was the political situation in Italy that could drag into months without a government and potentially jeopardising the eurozone.

In the stock market, price movements are usually based on rumours and anticipation, not on actual events. Thus, all factors considered – low trading season, anticipated hike in interest rate, trade war, Italy’s political conundrum, and geopolitical uncertainty led to the global drop in share prices.

Surely experienced former finance ministers are aware of these events. – June 20, 2018.

* Wong Ang Peng is a researcher with an interest in economics, politics, and health issues.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.