Since the launch of a new M$10 billion ($2.6 billion) government
fund in January, the Kuala Lumpur Stock Exchange Composite Index
(KLCI) has risen 2.3%.
The fund, called ValueCap, is controlled by two large government
investment vehicles, Khazanah Nasional and Permodalan Nasional, and
by Kumpulan Wang Amanah Pencen, the civil servants' pension
fund.
According to the finance ministry, ValueCap is supposed to
buy undervalued shares and improve liquidity in the stock market.
CIMB Research, the research arm of local investment bank CIMB,
estimates that the fund constitutes 3.4 % of KLCI's market
capitalization and approximately 31 trading days' volume (based on
a three-month average).
Investors are...
