Malaysia’s removal from watch list is recognition of BNM’s efforts

By TMR / Pic AFP

THE removal of Malaysia from FTSE Russell’s Watch List is in recognition of the various tangible initiatives implemented by Bank Negara Malaysia (BNM) over the past two years, said the Financial Markets Association of Malaysia (FMAM).

In a statement yesterday, the association noted the streamlining of compliance, regulatory and operational requirements for both local and foreign participants, consolidation of government bond issuances, enhancement to repo market and dynamic hedging framework, option for physical delivery MGS futures and liberalisation of interest-rate swap, all contributed to a more resilient, vibrant and efficient Malaysian government bond market.

“FMAM will continue to coordinate across the different financial institutions for the common goal of developing Malaysia as a preferred investment destination. While we congratulate Malaysia on the FTSE Russell’s decision, the concurrent announcement of inclusion of China and reviews for inclusions of other markets are a reminder for all of us that there is no room for complacency and we need to continue to be incremental and progressive,” FMAM president Chu Kok Wei stated.

FTSE Russell took Malaysia off the watch list for possible exclusion from its World Government Bond Index, saying it will remain in the measure and remove the uncertainty hanging over the nation’s debt markets.

“We commend BNM on its previously implemented and ongoing initiatives to address the concerns of foreign investors when accessing the Malaysian government bond market,” FTSE Russell said in a statement.

Malaysia’s central bank introduced several measures to improve market liquidity since FTSE Russell first gave notice that it may drop ringgit bonds from its index two years ago. Analysts had estimated billions of dollars of investments were dependent on the decision.