By Ranjit Singh
NEWLY minted Finance Minister Tengku Zafrul Tengku Abdul Aziz will have his hands full in navigating the Malaysian economy through challenging times.
Sunway University professor and member of Bank Negara Malaysia Monetary Policy Committee Dr Yeah Kim Leng told FocusM that Tengku Zafrul’s immediate task would be to ensure that the RM20 bil economic stimulus package is dispensed swiftly.
This is to enable the economy to mitigate the slowdown resulting from the Covid-19 outbreak.
“The new finance minister faces a steep learning curve as the economy grapples with a multitude of shocks from abroad and locally. He has to quickly assess the adequacy of the stimulus package and ensure it is implemented expeditiously to mitigate the Covid-19 economic impact,” said Yeah.
The current sharp drop in global oil prices may necessitate the government to relook at its Budget 2020. When the Budget was announced in October 2019, the oil price assumption was US$50 per barrel but the current oil price is around US$36 per barrel.
“He may need to recalibrate the 2020 budget if the oil price plunge does not recover. Regardless of the recalibration, the finance ministry needs to ensure that government spending, procurement contracts and large projects are not disrupted as this will dampen further the already soft domestic demand,” added Yeah.
Yeah also said that Tengku Zafrul will need to continue the thrust to strengthen public finance integrity and good governance, including prudent spending and efficient debt management. He will, therefore, have to engage the various stakeholders including domestic and foreign investors to gain their trust and confidence that the country’s fiscal and financial management remain in steady hands.
Meanwhile, Professor Obiyathulla Ismath Bacha from INCEIF told FocusM that Tengku Zafrul’s appointment as finance minister would be positive for the economy. This was because being a non-politician, he would not be encumbered by politics in making his decisions for his ministry.
“Tengku Zafrul has his pulse on the economy, he has sound knowledge of how capital markets work and this would aid him in carrying out his functions effectively,” said Obiyathulla.
He added that Tengku Zafrul has the knowledge of managing debt and dealing with the credit rating agencies and this should augur well in him navigating the nation’s finances.
Tengku Zafrul started out as a corporate finance executive in AmInvestment Bank in 1996. He then joined Crédit Agricole as an investment analyst, moving up to director within a few years. Succeeding this, he became the advisor to the president of Tenaga Nasional Bhd.
He then joined CIMB Investment Bank, after which he was appointed as group managing director of Avenue Capital Resources (now ECM Libra), a listed company specialising in financial services (investment banking and fund management). He was also the CEO of Avenue Securities and the chairman of Avenue Asset Management. Tengku Zafrul then went on to become the head of investment banking for Citigroup Malaysia.
He was also the substantial shareholder of Tune Money Sdn Bhd, Asia’s first “no-frills” online financial service provider as well as its CEO.
He was also the group director of Kenanga Holdings Bhd and director of Kenanga Investment Bank Bhd. Prior to assuming his most recent role with CIMB, Tengku Zafrul was the CEO of Maybank Investment Bank, the fully-owned investment banking arm of Malayan Banking Bhd.
Prior to his appointment as senator on March 10, Tengku Zafrul was the former group CEO of CIMB Holdings Bhd. He is the country’s first finance minister who is a non-politician. – March 10, 2020
