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SC, Bursa: No suspension of financial markets

19 Mar 2020 / 16:15 H.

KUALA LUMPUR: Despite heightened market volatility and the movement control order, the Securities Commission (SC) and Bursa Malaysia Bhd assured that the financial markets will not be suspended.

“It is important for the markets to remain open, as closing the markets would neither mitigate nor address the underlying causes of market volatility. Instead, it will create greater uncertainty and adverse market sentiment by denying investors’ access to their investments,” they said in a joint statement in response to the Association of Stockbroking Companies of Malaysia chairman Datuk Azman Manaf’s call to suspend the trading of Bursa Malaysia Securities.

The regulators stressed that Malaysia has a resilient domestic market and capital market ecosystem.

“Our market continues to be supported by deep domestic liquidity amongst our large institutions. During challenging market conditions, investors need certainty and continuity.”

The regulators said they have business continuity measures in place, including backup sites, recovery facilities and alternative communications channels to operate the market in a pandemic situation.

“Similarly, all market intermediaries have in place business continuity frameworks to ensure continuity of their business.”

The SC and Bursa added that market management measures are in place and known to participants to manage excessive volatility.

“Robust clearing funds, margins and deposits are also in place to ensure clearing and settlement risks are managed.”

The regulators said they will continue to monitor the ongoing developments to proactively manage risks in the marketplace and will introduce additional precautionary measures as appropriate.

Earlier, Azman Manaf said market suspension is necessary as a defensive measure to protect the equity market from suffering severe damage that could take almost a decade to heal.

“With the suspension of Bursa Malaysia, all participants of the stock market, i.e investors, market players, pension funds, brokers, investment bankers, foreign investors and fund managers, will be able to utilise the time and relaxation to re-engineer their strategic and trading portfolios, as well as to avoid liquidation of accounts and force selling of leveraged accounts,” he said in a statement.

On Tuesday, Philippines became the first country to suspend its stock market trade in response to the widening coronavirus pandemic.

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