Government To Monitor Foreign Inflow Of Funds Into Stock Market

The government is closely monitoring the substantial inflow of foreign funds into the current bullish stock market which has been setting new records since the beginning of the year.

"The government is very concerned and we are monitoring these realtime transactions online.

"We can monitor these inflows as they need to go through local investment banks before they enter the market and banks are obligated to inform Bank Negara Malaysia about these inflows," Deputy Finance Minister Datuk Donald Lim Siang Chai told reporters after launching the Virtual Digital Mall here Friday.

He said the country practiced a free economic policy and the government could not control the outflow and inflow of funds into the country, but it was taking steps to persuade the funds to stay in the country for sometime before cashing out.

"If we know any substantial fund that is heading into the country, we can engage the fund managers and promote Malaysia as an ideal country to park their money for the long-term and still expand their portfolio and profits.

"At the moment, with the state of liquidity in our market, I think we are strong enough to withstand any unforeseen circumstances, in addition to our foreign reserves which, as at Dec 15, 2010, stood at US$106 billion.

He added BNM was working very closely with other central banks in the region to manage and handle hot money that was flowing into the region currently.

On the launch of the Virtual Digital Mall, Lim said the government was pleased as it was in line with efforts to develop an e-commerce industry in Malaysia.

The Virtual Mall is an e-commerce platform developed by SM Digital Mall Sdn Bhd and is the first digital mall operator in Malaysia to offer e-commerce for its tenants and customers.

SM Digital Mall is the manager of the Digital Mall located in Section 14, Petaling Jaya.

"We currently have 20 tenants already in our virtual digital mall, and we intend to bring on board more by year-end from our current pool of 100 tenants in Digital Mall," said Executive Director Eric Seow.

He added the company was providing a new business platform and opportunity to its tenants for free aimed at empowering both large and small tenants business presence beyond the physical outlet.

-- BERNAMA