March 19, 2020 / 9:27 AM / 20 days ago

UPDATE 2-Malaysia financial markets to stay open during partial lockdown

(Adds association chairman’s clarification)

By Liz Lee

KUALA LUMPUR, March 19 (Reuters) - Malaysian capital markets will stay open during a two-week partial lockdown on the movement of people prompted by the coronavirus, authorities said on Thursday, despite a call to shut them down to prevent a collapse.

In a joint statement, market regulators said they would maintain continuous trading and market operations so investors can manage their risks and opportunities.

“Closing the markets would neither mitigate nor address the underlying causes of market volatility. Instead, it would create greater uncertainty and adverse market sentiment by denying investors’ access to their investments,” the statement said.

The regulators would monitor developments to “proactively manage risks in the marketplace, and will introduce additional precautionary measures as appropriate”, they said.

Malaysia has shut its borders to travellers, restricted internal movement, closed schools and universities and ordered most businesses to shut until at least the end of the month.

Azman Manaf, the chairman of the Association of Stockbroking Companies Malaysia (ASCM), told Reuters that, in his personal opinion, and not that of the association, trading should be suspended.

“The views of the other committee members of the association did not necessarily jive with mine,” Azman said by phone.

A statement had noted that the Malaysian stock market lost 23% of its market capitalization since the end of 2019, to 805 billion ringgit ($182 billion), by Wednesday.

The stock index fell on Thursday to its lowest level since 2009. Malaysia’s 10-year bond yields have risen 61 basis points in the past two weeks to 3.37%.

MIDF Research analyst Adam Mohamed Rahim said the stock exchange saw a foreign net outflow of 1.23 billion ringgit ($280 million) from Monday to Wednesday, extending a foreign selling streak to 20 days.

Monday’s foreign net selling of 520.4 million ringgit was the largest in a day since June 2018, he said. Year-to-date, international funds have pulled out 6.40 billion ringgit. (Reporting by Liz Lee Editing by Toby Chopra, Peter Graff and Nick Macfie)

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