Monday, July 14, 2008

Nazir disagrees with Najib's, DPM, claim

KUALA LUMPUR: CIMB Group Sdn Bhd's chief executive Datuk Seri Nazir Razak disagreed with the government which said that international investor confidence is not swayed by the current cloudy political outlook.

"It is very important for the political situation to settle down. I’m sorry but I disagree with the deputy prime minister (Datuk Seri Najib Razak) saying that international investor confidence is not affected,” the younger brother of the DPM told reporters on July 11.

Last Tuesday, Najib said that the global economic outlook was the factor that caused investors to think twice about investing in Malaysia, not the current local political situation.

The Edge Financial Daily reported last Monday that the combination of political uncertainties, soaring inflation and weaker economic growth had led to a downward revision on the outlook of the Kuala Lumpur Composite Index (KLCI) for the second half of the year. The confluence of negative news has prompted at least one foreign research house to forecast a year-end target for the KLCI at below the psychologically 1,000-point mark.

CLSA Research downgraded its rating for the KLCI to underweight from neutral, and cut its year-end target for the index by 13% to 980 points from 1,150 previously. At the same time, the research house also expected corporate earnings growth to weaken on higher inflationary pressures next year.

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