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Malaysia: Economic uncertainty lifted
PETALING JAYA: The FBM KLCI has reacted positively after Budget 2021 was passed by lawmakers.
At the close, the index was up 14.53 points after the RM322.5bil federal budget, the nation’s largest, was passed despite a call by the Opposition for bloc voting.
The event will help suppress the political uncertainty that has been weighing down on business sentiments, according to experts.
UOB Malaysia senior economist Julia Goh said it would help shore up investor confidence at a time of heightened economic and political uncertainty.
“Given that the recovery path remains uneven, there is a need to pass the budget and ensure additional reinforcements to support the recovery and economy.
“There are several signs that the economic conditions have retraced in the fourth quarter of 2020, due to the resurgence of infections and the conditional movement control order. Hence the passing of the budget will help support consumer and business sentiment, which has turned more cautious, ” she told StarBiz.
Sunway University professor of economics Yeah Kim Leng (pic below) said the people can move ahead now that the budget has been passed.
“The public and civil service can heave a sigh of relief that the uncertainty over Budget 2021 is over. All stakeholders can now focus on effective coordination and implementation as the economy is not out of the woods yet.
“Quick and efficient implementation of the budget measures will be key to ensure sustainable economic recovery in 2021.
“While some finetuning of allocations continues to be negotiated in parliament, it is encouraging that the broad strategies and spending areas remain generally intact.”
The FBM KLCI closed up 0.91% to 1,612.11 yesterday, representing a strong recovery from the early low of 1,592.
Turnover was 8.86 billion shares valued at RM4.67bil.
Advancers beat decliners nearly two to one or 816 gainers to 412 losers and 428 counters unchanged.
The government had tabled Budget 2021 three weeks ago, in a bid to revive the economy.
There was a sense of relief among Perikatan Nasional lawmakers after the policy stage of the budget was passed with a voice vote in Parliament yesterday.
The voting had been moved twice from Nov 23 to Nov 25, and Nov 25 to yesterday.
There are 220 MPs out of the 222-seat Parliament at following the deaths of Batu Sapi MP Datuk Liew Vui Keong and Gerik MP Datuk Hasbullah Osman. The Perikatan Nasional government required a simple majority of 111 MPs to pass the budget.
Source: https://www.thestar.com.my/business/business-news/2020/11/27/economic-uncertainty-lifted