KUALA LUMPUR, Dec 22 (Reuters) – Malaysia may raise its stake in government-linked firms as falling share prices make it cheaper to buy up stock of companies with long-term value, Deputy Prime Minister Najib Razak was quoted on Monday as saying.
The government would not cut its holdings in state-linked companies until market conditions improve, Najib, who is also Finance Minister, was reported as saying by the Malaysian Reserve.
Malaysia had earlier promised a gradual sale of state equity once it reforms state-linked firms to boost market liquidity. But progress has been modest, leading foreign investors to complain about market illiquidity.
“It’s not a good time to sell down anything. We will not get a good value yet,” Najib said.
“But it’s a good time to increase your stake in companies that have long-term value. EPF (Employees Provident Fund) is in a position to increase its stakes and is looking at some good long-term investment potential.
The government holds stakes in some of Malaysia’s largest companies such as top lender Malayan Banking (MBBM.KL) and power firm Tenaga Nasional (TENA.KL).
The Malaysian stock market KLSE has lost about 40 percent this year, roughly in line with the performance of most regional markets.
Najib also said the government would work with neighbouring Indonesia to stabilise the price of crude palm oil. The two countries control about 90 percent of the palm oil output, he said.
“I see this (falling commodity prices) as a temporary aberration rather than something continuing in the medium term,” he said.
“So I expect the price of petrol to go up and palm oil to go up again.
(Reporting by Liau Y-Sing; Editing by Julie Goh).