ASSET managers have panned calls for Bursa Malaysia to be suspended after it was reported that certain industry players were calling for the suspension of the local bourse.
The Malaysian Association of Asset Managers (MAAM) said in a March 19 statement that it didn’t agree to such suspension calls, and strongly opposed the motion by certain industry players.
“We believe in the fair and orderly functioning of the business change without interference which can be construed as a form of capital control in such a tense global situation,” MAAM said.
Earlier today, Datuk Azman Manaf, who is also the chairman of the Association of Stockbroking Companies of Malaysia, called for the suspension in line with the recent Movement Control Order declared by Prime Minister Tan Sri Muhyiddin Yassin.
“Bursa Malaysia should be suspended for the time being as a defensive measure to protect the stock market from suffering severe damage that could take almost a decade to heal,” he said in a statement today. Azman spoke in his personal capacity.
In 1997, the Hong Kong Stock Exchange suspended trading at the height of the Asian Financial Crisis and upon reopening four days later fell 33%. Similarly, closer to home, the Philippines Stock Exchange was suspended for a day yesterday and opened 24% lower on opening today.
“We believe any move to suspend trading does not address the underlying issues facing the country and the stock market and will exacerbate unnecessary volatility and feeding on current uncertainty,” MAAM said.
Bursa Malaysia, as well as Securities Commission Malaysia (SC), also said in a joint statement that it would maintain continuous trading and market operation “to facilitate investors to manage their risks and opportunities during this period.”
Both regulators said that Malaysia had a “resilient domestic market and capital market ecosystem” where the country’s large institutions continue to support the market. “During challenging market conditions, investors need certainty and continuity,” they said.
SC and Bursa pointed to, among others, market management measures such as circuit breakers, static and dynamic price limits which investors are familiar with to manage excessive volatility.
“Robust clearing funds, margins and deposits are also in place to ensure clearing and settlement risks are managed,” they said. – March 19, 2020
