Mahathir says to review Malaysia-Singapore stock market trading link, confirms central bank chief has quit

Malaysia's central bank governor Muhammad Ibrahim has resigned from his post.
Malaysia's central bank governor Muhammad Ibrahim has resigned from his post. PHOTO: THE STAR/ASIA NEWS NETWORK

KUALA LUMPUR - Malaysian Prime Minister Mahathir Mohamad said on Wednesday (June 6) his new government will study a project announced by the previous administration to form a new trading link between the stock markets of Singapore and Malaysia.

The Monetary Authority of Singapore (MAS) and Securities Commission Malaysia had said in February they would work together to set up a stock market trading link by year end to enable Singapore and Malaysian share investors to trade in Bursa Malaysia (BM) and the Singapore Exchange (SGX).

The link, first announced by then Malaysian Prime Minister Najib Razak, would provide access to a total of 1,600 public-listed firms worth more than US$1.2 trillion (S$1.6 trillion). The initiative was to be expanded later to include other stock markets in the region.

Tun Dr Mahathir also said after a Cabinet meeting on Wednesday he had accepted the resignation of central bank governor Muhammad Ibrahim and would meet the King as soon as possible to discuss Tan Sri Muhammad’s successor.  

 

"We have not decided on his successor because we need to have the approval of the Agong before we can announce," Dr Mahathir told a news conference, referring to seeking approval from the King.

He said the replacement of the Malaysian stock exchange chief was not discussed. Reuters cited two sources as saying earlier on Wednesday Malaysia is looking to replace the chief executive officer of the stock exchange.

Mr Muhammad, whose five-year term at the central bank, or Bank Negara, isn’t due to run out until 2021, had offered to resign on Tuesday following revelations that proceeds from a RM2 billion land purchase by the bank were used to help troubled state fund 1Malaysia Development Berhad (1MDB), the Wall Street Journal reported, citing people familiar with the matter. 

The former government of Datuk Seri Najib, who lost power in an election last month, sold land to the central bank in late 2017 to raise money to help pay the 1MDB fund’s huge debt, the Wall Street Journal reported in May, citing people familiar with the transaction.

Malaysia’s Finance Ministry later confirmed the report.

The land deal put the independence of the central bank from government business in Malaysia into question.

Bank Negara Malaysia said it bought the land from the Finance Ministry at market prices. Last month, the bank said it “has extended comprehensive information on the transaction to the Malaysian Anti-Corruption Commission for its complete and independent review”.

The new government of Dr Mahathir has called for an investigation by the anti-corruption commission of the central bank’s land purchase.

Mr Muhammad said on Wednesday he was resigning as public confidence in the bank has been eroded over the land deal. 

"As a central bank, we are only as effective as the trust and confidence that the people of Malaysia and its leaders place in us," Mr Muhammad was quoted by state news agency Bernama as saying in a WhatsApp message.

"I am prepared to relinquish my post if I no longer have the strong trust and support of the public. I cannot in good conscience continue if it affects the bank's image and reputation."