Malaysia: How much more bad news?
It is hard to judge which was the worst piece of news to hit the Malaysian stock market and corporate community in the last few months. Was it the remarks made by prime minister Mahathir Mohamad blaming international speculators for the Asian meltdown?
Was it the flip flop in market trading policy which spooked international investors? Or perhaps it was the rumours that banks were being banned from making margin calls on investors who had lost millions in the collapsing stock market. Or perhaps the decision to ban five brokers from buying stock until they had "regularized their trading position".
Many would say that the first clear signal of major troubles ahead came in late November when the government announced it would take over the controversial $M5.3 billion ($1.5 billion) Bakun Dam project from tycoon Ting Pek Khiing. The dam project is designed to bring electricity from Sarawak in east Malaysia to the peninsular but has been postponed.
The government takeover announcement caused an 11% one-day drop in the Kuala Lumpur index. It followed the revelation a few days earlier that UEM, a key blue-chip stock, would pay M$2.4 billion, an 11% premium to the prevailing price, for a 32% stake in its parent company, Renong.