KUALA LUMPUR: The government is considering listing state-owned entities on the stock market as part of efforts to reduce debt and liabilities.
Prime Minister Tun Dr Mahathir Mohamad said a debt and liability management committee has been formed to look at the government’s balance sheet and implement strategies to reduce debt and liabilities, including government guarantees.
“This committee is currently undertaking measures to strengthen the overall debt management framework.
“The strategies, among others, include greater risk control parametres on issuances of government guarantees, better market access and identification of opportunities on potential asset monetisation, which means mature unlisted government entities may be listed in the stock market, as well reducing some of our GLCs shareholdings in the public-listed companies,“ he said in his keynote address at Invest Malaysia 2019 today.
Mahathir noted that the key guiding principles for monetising any of its assets is that the disposal or monetisation must never be done at fire-sale prices while any disposal of shares, monetisation of assets, auctions or other measures must be done in an orderly manner and communicated cohesively across all implementing entities.
“There shall be no disruptions to the capital markets, confidence to the financial markets, ratings environment and economic growth,“ he added.
Mahathir said the reckless utilisation of off-balance sheet instruments by the previous government has led to a massive build-up of contingent liabilities to the government, some of which are already materialising.
In terms of restoring credibility in the economic and financial policies while reducing vulnerability, he said the immediate challenge is to reduce debt and liabilities and rebuild the fiscal space.
To ensure public sector accountability in presenting the accounts and balance sheet of the country, the government is introducing the Fiscal Responsibility Act.
In addition, the Fiscal Policy Committee is monitoring key developments closely to ensure that Malaysia’s fiscal consolidation target remains on its path.
“We are confident that we are on track,“ Mahathir said.
