LETTER

The essential moves gov’t must make to protect businesses

M Murly

Published
Modified 23 Mar 2020, 8:09 am

LETTER | Dear Prime Minister Muhyiddin Yassin,

I write to you today not out of personal interest or gain, but as a very concerned citizen who is burdened for our beloved nation. The whole world is in a biowarfare, battling a common enemy, the Covid-19 that is unleashing a deadly onslaught not only on our people, but businesses and the economy.

I applaud your courage in taking the bold move to enforce the Movement Control Order (MCO) nationwide which is absolutely necessary to flatten the curve of infection. This move that you made, within days of taking charge of the government, to protect the rakyat is sincerely commendable. I, as a citizen and family man am extremely grateful for your swift action.

As a corporate citizen and as part of the business community in Malaysia, I would like to highlight that we, the non-essential business community have risen to the government’s clarion call by fully complying to the MCO with due diligence, and ceased all our operations.

However, I am compelled to draw your attention to a critical matter that may have a long-term detrimental and destructive effect on our economy, businesses, people and the nation.

The stark reality of the non-essential business communities’ compliance to the MCO is that the source of income has been compromised and earnings have come to a standstill. To add fuel to fire, the stocks of our business community are being slaughtered at the Bursa with some experiencing all-time lows and rock-bottom valuations based on trailing earnings.

Do you realise that most of the business communities have already been ‘infected’ by the coronavirus-sparked market crash in the Bursa Malaysia KLCI? The closure of business operations has put a deadly strain on the majority of stocks that are being traded and some are experiencing its after effects. I am led to wonder how long can these companies be able to withstand this onslaught.

Truth be told, I fully expected the Securities Commission and Bursa Malaysia to comply with the MCO, considering that trading and investing fall under the category of non-essential businesses. Instead I was astonished by their announcements as follows:

“We will maintain continuous trading and market operations, to facilitate investors to manage their risks and opportunities during this period."

“Containing Covid-19 is a top priority for the government, facilitated by a fully-functioning financial system, including the stock market.”

It is an irrefutable fact that all non-essential businesses - small and large corporations - make up more than 90% of the entire Malaysian economy. These entities provide employment to our people and the majority of the working class rely on them for their livelihood. If these companies and businesses are willing to take a direct hit by ceasing operations in compliance to the MCO, should we facilitate investors to manage their risks and opportunities at a critical time such as this?

Aren’t we all in this together, waging a war against Covid-19? We, the business community are doing our part, while unscrupulous investors are causing a carnage in the Bursa, at the business community’s expense and nation’s well-being! I truly do not see the reason for investors and traders to be given the exemption to carry on business as usual since trading and investing is a non-essential business after all.

The SC and Bursa must realize that traders and investors are only one part of their stakeholders, the other crucial part is the actual businesses and companies listed on the exchange. As such, they have the mandate to not only protect investors, but also all the businesses listed on the exchange. Especially in this crisis, which is not anyone or any business’ fault. Every one globally is affected by the pandemic and the devastating impact it is expected to bring to the world.

Therefore, it is imperative for the SC and the Bursa to not make the grave mistake of classifying the current situation as merely an economic crisis. It should be viewed through the lens of harsh reality - we are in a predicament that can be likened to a world war! The only difference is, we are in a biowarfare, not attacked by nations or humans but by a virus that is far deadlier.

I believe, during this time, the general market sentiment is driven by fear and trading is unfairly based on uncertainties and speculation. I sincerely doubt that the government would want or even tolerate such investment practices in our Bursa. Moreover, why should the business community that is under MCO bear the brunt and wrath of a volatile market and the impending economic shock that it will result in?

The government must take charge and put a stop to it, and the damage will be minimised drastically! This is the time to take unconventional actions and bite the bullet. Just as we did during the Asian financial crisis, also known as the ‘Asian Contagion’. In the face of fears of a worldwide economic meltdown and currency devaluations, we, Malaysia, took an unprecedented action to peg our ringgit against the dollar. Yes, it drew a lot of criticism and opposition but in the long run it served us in good stead.

Similarly, protectionist measures need to be taken now and urgently! I, as a corporate citizen with a vested interest in the nation’s economic well-being and as part of the larger business community urge the government to close the Bursa Malaysia KLCI in tandem with the MCO imposed on non-essential business.

I agree that having a fully functioning financial system is paramount, but to include the Bursa as part of a functioning financial system in the current situation is an invalid argument that cannot hold water. After all, on what basis would investors be able to discern, gauge and make buying and selling decisions, when businesses have temporarily ceased operations?

Others may argue that closing the Bursa during the MCO will be detrimental, especially when the market eventually opens post MCO. That doesn’t have to be the case if we are prepared and take preventative actions! What we can do is formulate and implement key strategies such as circuit breakers and other measures to dodge excessive drops and track unusual volume activities. Major markets around the world practise this and by emulating them, I believe the Bursa and SC will be able to control the current devastation and minimise its ripple effects.

Moreover, by the time the Bursa resumes, companies would have had the opportunity to assess their businesses with their respective stakeholders and investors. They would have had crucial time to have clear communication plans of their future. Ultimately, this will enable investors to make better and sound decisions in maintaining, investing or divesting.

In summary, if trading and investing are allowed to continue while non-essential businesses and companies are under MCO and are unable to defend themselves, businesses will suffer and some may never recover. The ultimate victims of this catastrophe will be our rakyat! Simply because, they are the workforce who will experience brutal lay-offs as businesses shut down and unemployment grow at alarming rates. People will lose hope, many their life savings and livelihood.

I am well aware of the tremendous responsibility that the government is shouldering, as our ministers, healthcare personnel, police and defence forces are battling the pandemic out there. As a business owner with a track record of accomplishing much within a short span of establishing our business, I am willing and ready to offer my skills-set and services to your department and the government during this crucial time.

The immediate foreseeable future is grim and this pandemic is bound to wound and scar us, although the crisis is in no way self-inflicted by any particular business sector or industry. But I have hope and trust that the government will do the right thing by taking extraordinary measures to safeguard the national economy to minimise the impact of this pandemic and save the rakyat.

From a concerned citizen and business owner, wanting to help Malaysia fight the good fight!


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The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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