Mahathir says 'serious' investors have returned

Mahathir says 'serious' investors have returned

KUALA LUMPUR (AFP): Malaysian Prime Minister Mahathir Mohamad met foreign fund managers Saturday and expressed confidence that "serious" foreign investors had returned to the local stock market after recent sharp declines.

"They have already gone back to the market. There is no doubt," he told reporters attending the annual congress of the country's main ruling party.

"These are serious investors," the prime minister said, drawing a sharp contrast between such investors and "manipulators who are just coming in to play around with the market in order to make gains for themselves."

"These are people who are investing and they themselves do not like to see the shares go down because they bought these shares at a higher price.

"So if the shares go down, they lose money. They would like to see the shares appreciate again," he said.

Mahathir declined to identify the foreign fund managers but sources said at least 12 were involved in the lunchtime meeting at a hotel adjacent to the headquarters of his party, the United Malays National Organization (UMNO).

Deputy Prime Minister and Finance Minister Anwar Ibrahim also attended, along with former finance minister Daim Zanuddin, a leading businessman who also serves as government economic advisor, the sources said.

The remarks by Mahathir came on top of a 12 percent surge in share prices Friday, the biggest one-day gain in almost four years, following news that trading restrictions had been lifted and huge infrastructure projects delayed.

"I would like to believe that the worst is over," Daim told reporters earlier Saturday after a separate meeting with foreign fund managers on Friday. He said he would hold further meetings with fund managers on Monday.

Daim reportedly said that foreign fund managers were "initially shocked" at recent government restrictions to halt the slide in Malaysian share prices, which have plunged by about a third so far this year.

"But we explained to them that we had to resort to some kind of action to trap the short sellers," he said, referring to traders who try to make profits by selling shares in the hope of buying them back later at a lower price.