Calpers lists KL as investable markets<\/p>\n
Bloomberg, Kuala Lumpur<\/p>\n
The California Public Employees' Retirement System, the biggest
\nU.S. pension fund, reinstated Malaysia to the list of markets in
\nwhich it may invest, a move that may encourage other overseas
\ninvestment in the country and the region.<\/p>\n
Calpers, as the fund is known, added Malaysia to the list
\nafter a two-year hiatus on the advice of Wilshire Associates
\nInc., spokesman Brad Pacheco said in a statement on Calpers' Web
\nsite. The fund cited improved political stability, financial
\ntransparency, labor standards and market liquidity.<\/p>\n
The upgrade comes three months after the appointment of
\nPrime Minister Abdullah Ahmad Badawi, who has shunned the large-
\nscale building projects of his predecessor Mahathir Mohamad, and
\npromised to reduce corruption. It may boost investors' interest
\nin stocks such as Malayan Banking Bhd., Telekom Malaysia Bhd. and
\nTenaga Nasional Bhd., said investors, including Michael Marusiak.<\/p>\n
\"It's yet another sign that things are getting better in
\nMalaysia,\" said Marusiak, who helps manage US$650 million in Asia,
\nexcluding Japan, for Singapore-based Principal Global Investors.<\/p>\n
\"It's a sign of better corporate governance and transparency,
\nand less reliance on large projects to generate growth.\"<\/p>\n
Marusiak expects large capitalized stocks such as Malayan
\nBanking Bhd., Telekom Malaysia Bhd. and Tenaga Nasional Bhd. will
\nbe direct beneficiaries of the move by Calpers.<\/p>\n
The broader market may gain as well. Malaysia's key Kuala
\nLumpur Composite Index, up a third in a year, has nevertheless
\nlagged benchmarks in neighboring markets. Singapore's Straits
\nTimes Index is up 44 percent, while Thailand's SET Index has
\nalmost doubled in the past 12 months.<\/p>\n
Calpers, with US$167 billion of investments, halted investment
\nin Thailand, Indonesia and Malaysia in February 2002, citing a
\nlack of transparency, political instability and poor labor
\nstandards.<\/p>\n
The move comes at a time when Malaysia's credit ratings are
\nrising, economic expansion in the $93 billion economy
\naccelerates, and earnings at some of its biggest companies
\nimprove.<\/p>\n
Investors have also praised a smooth transition of power for
\nPrime Minister Abdullah Ahmad Badawi, who has embarked on a
\ncampaign to reduce corruption. Investors say the move reflects
\nrecent reforms by the country to attract investment.<\/p>\n
\"Malaysia was moved into the investable universe because it
\nmade improvements,\" Pacheco said in the Calpers statement.<\/p>\n
Bond investors too have shown increasing confidence in the
\ncountry, willing to accept less yield to buy Malaysian debt in
\nthe past year.<\/p>\n
The government's 7.5 percent dollar-denominated bonds
\nmaturing in July 2011 were bid at a yield of about 83 basis
\npoints more than like-maturity U.S. Treasuries as of 9:39 a.m. in
\nHong Kong, according to Deutsche Bank AG prices. A basis point is
\n0.01 percentage point.<\/p>\n
The yield premium narrowed from about 1.74 percentage points
\nin March, Bloomberg data show.<\/p>\n
Overall, the Calpers move \"is good\" for Malaysia, said Tan
\nJin Teik, who as the chief executive officer of Avenue Asset
\nManagement in Kuala Lumpur, helps manages the equivalent of $395
\nmillion in stocks and bonds.<\/p>\n
Calpers has as much as $2.6 billion invested in the region.
\nPacheco declined to provide details of the value of its planned
\ninvestment in Malaysia, saying in a telephone interview that
\nthere wasn't a \"target allocation\" for individual countries.<\/p>\n
Yesterday, Calpers said it would wait to sell about $67
\nmillion of its holdings in the Philippines pending a review by
\nWilshire of the government's plans to improve corporate
\ngovernance and overall stability in the country.<\/p>\n
The fund also gave Argentina, Peru and Turkey a year to
\nimprove, while regional markets like Thailand, Sri Lanka, India
\nand China continue to be excluded from its \"permissible markets
\nlist\".<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/calpers-lists-kl-as-investable-markets-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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