August 14, 1999 
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| August 14, 1999 | atimes.com | |
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| Southeast Asia Index shift gives Malaysia a 12% boost KUALA LUMPUR - The Malaysian stock market soared again Friday following the announcement by Morgan Stanley Capital International (MSCI) on Thursday evening that it will include Malaysia in its Emerging Market Index. The Kuala Lumpur Stock Exchange (KLSE) Composite Index leapt 6.02%, ending the day at 772.88 points. The market had reacted favorably on Thursday in anticipation of the announcement, rising 5.87 percent on heavy buying. MSCI announced that it will reinstate Malaysia in its emerging market and all-country indices from February 2000 as long as there is no reversal of the country's financial liberalization. The MSCI index, calculated since 1969, is the premier benchmark for investment managers to measure the performance of stock markets around the world. The MSCI Malaysia Free Index will be re-included in the Emerging Markets Free index series and the MSCI All Country (AC) Free index series, including the MSCI AC Far East Free ex-Japan Index. "The objective of the MSCI EMF indices is to provide an accurate reflection of the investment opportunities available to the international investor in emerging markets," MSCI said. Malaysia was admitted into the MSCI index in 1992 but was delisted upon the imposition of selective capital controls in September last year. Despite the economic upturn and the improvement in the KLSE since early this year, the country continued to be left out. The president of the Malaysian Investors Association, PHS Lim, said: "Though this will happen next year, it is enough to give the confidence that the KLSE will ultimately be reinstated." He said the reinstatement was good news for the market as some investment funds had said they would not invest in a particular market unless its index was included in the MSCI family of indices. Lim noted that the market had fallen by almost 30 percent in the past two weeks and the rebound was justified. MSCI said that in line with Malaysia's lifting of restrictions on the repatriation of capital on September 1, the 15 percent discount MSCI applies to the pricing of all Malaysian securities via the foreign exchange rate will be discontinued. (Asia Pulse/Bernama) | |||||||||
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