KUALA LUMPUR: Malaysia is not prone to slip into a recession due to the diversified framework of its economy which is less dependent on commodities, aside from its practical and responsive insurance policies, said Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.
He observed that the agriculture plus mining sectors at this point only contribute fourteen per cent to Malaysia’s gross domestic item, while the services industry accounts for 57 percent and the manufacturing industry contributes 24. several per cent.
“The diversity of our trading partners — where we are not excessively dependent on one particular nation — adds to our economic resilience, ” he said in the opening remarks in the ‘Invest Malaysia 2022 Series 1: Building Resilience Amidst Volatility’ here, today.
Abdul Wahid mentioned Malaysian banks plus financial services companies possess significant weighting both in the FTSE Bursa Malaysia KLCI and the FTSE4Good Bursa Malaysia sustainability index.
“These seven financial stocks alone, specifically Maybank, Public Financial institution, CIMB Bank, Hong Leong Bank, RHB Bank and Alliance Bank have a combined market capitalisation of RM325. 36 billion, or about 20 per cent of the overall market capitalisation associated with RM1. 65 trillion as at end-June 2022, ” this individual said.
He also said the particular financial system is accompanied by well-functioning debt and equity capital markets, which were worth RM3. 5 trillion as of June thirty, 2022, where the financial debt capital market made up RM1. 8 trillion and the equity funds market made up RM1. 7 trillion.
“Malaysia is also home to the world’s top Islamic capital market at RM2. two trillion, representing nearly two-thirds of the overall capital markets, ” he said.
He said the particular strength and stability of the financial system are essential factors in Malaysia’s resilience, where nearby banks are well capitalised, liquid, better managed and effectively regulated and supervised by Bank Negara Malaysia.
“Banks furthermore continue to fulfil their intermediation role by mobilising funds to become channelled to effective sectors of the economic climate, ” he stated.
On the global front, Abdul Wahid noted that the United States-China trade tensions and the Ukraine-Russia discord have also caused product prices and logistics costs to escalate, resulting in high inflationary pressures globally, forcing central banks in order to tighten their financial policy to control in inflation.
“This is likely to result in economic slowdown plus potential recessions in certain countries in 2023, ” he mentioned. – Bernama