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June 12, 2007

The country’s finance industry must be competitive: Dr Ng
Malaysia, aspiring to achieve developed nation status by 2020, must have a competitive and robust financial industry to withstand global competition, Deputy Finance Minister Datuk Dr Ng Yen Yen said June 12.

"Global movement of funds and shifts in risk preferences would create volatility in the global financial markets and Malaysia should capitalise on such opportunities to work towards being a financial hub for the region in conventional financial services," she said at the Ninth Malaysian Finance Association Annual Conference 2007 in Kuala Lumpur on June 12.

Her speech at the two-day conference, organised by Universiti Teknologi Mara and the Malaysian Finance Association with the theme of "Positioning Malaysia as the Premier Financial Market", was delivered by the Finance Ministry's Parliamentary Secretary Datuk Seri Dr Hilmy Yahya.

Dr Ng said in this context, there existed an opportunity to find a niche in developing Malaysia's very own Islamic finance and takaful businesses.

"The government also aimed to attract funds from developed countries as well as the untapped market in the Middle East with a variety of conventional and Islamic investments which meant that it was vital the industry players to be creative and innovative in developing the domestic market to draw funds to this country by providing profitable investment alternatives," she said.

According to Dr Ng, there is an increase in interest among foreign institutions to take up strategic stakes in domestic entities.

"With the confidence and trust they placed in our financial and capital markets, I am sure Malaysia will be able to achieve our Vision 2020," she said.

Dr Ng said academicians, practitioners and regulators should complement each other in their efforts towards making Malaysia a global premier financial market.

"By working together towards a common cause, they will be able to innovate and produce new courses and training programs for discerning consumers in the industry and it is vital for universities and industries to produce quality human resources capable of ensuring continued growth in our financial system, thus positioning Malaysia as a global premier financial market," she said.

Dr Ng said the government regarded competitiveness and efficiency of the Malaysian capital market as a top priority and new measures would be undertaken to achieve these objectives through Bursa Malaysia, the Securities Commission and Bank Negara Malaysia.

"In addition to strengthening Malaysia's position as an international Islamic financial centre, mutual recognition regime should be established to facilitate the cross-border marketing of Islamic funds between Malaysia and other Islamic countries," she said.

Touching on the Malaysian economy, Dr Ng said the government was ensuring that the interest rate remained at a level that was conducive to sustainable growth in the domestic economy.

Further liberalisation to foreign exchange administration rules in line with the country's strategic objectives should support and enable the growth in facilitating financing for the private sector, she said.

Dr Ng said the Malaysian economy was expected to remain resilient and grew at a healthy rate of six percent in 2007, while the inflation rate was expected to fall.

"On the whole, the fiscal deficit will reduce even with the increased spending by the Ninth Malaysian Plan, while our economic outlook will be further enhanced following a reduction in the corporate tax rate to provide ample liquidity in the financial system," she said. BERNAMA

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