M'sia says Calpers investment cut shows 'lack of insight'
Malaysia today suggested that the decision by the United States' largest pension fund to withdraw from several Southeast Asian nations showed a lack of insight into the region's potential.
The California Public Employees' Retirement System (Calpers) said it would withdraw from Indonesia, Malaysia, the Philippines and Thailand, citing factors such as poor transparency, labor standards and human rights.
"Malaysia feels that being a relatively new player in the region, Calpers may not have a complete insight into the potential investment value of Southeast Asian emerging markets such as Malaysia," the government's National Economic Action Council executive director Mustapa Mohamed said in a statement.
He added that the government was confident other investment funds with a longer presence in the region "will be able to evaluate Malaysia and other emerging markets in the region with greater insight and experience."
Calpers said earlier this week that it had completed a comprehensive review of emerging market countries and would begin to take a public equity position in Poland and Hungary while eliminating its investment in the four Southeast Asian nations.
Financial risk
Calpers said Thursday its withdrawal of public investment was linked more to financial risk than social conscience.
"Some people are referring to these as social issues, but we believe that these are closely linked to the risk for an investor so in fact our decision was linked to financial performance," Calpers spokesman Brad Pacheco said.
Malaysia and Indonesia had scored poorly mainly on the human rights and democracy fronts, while the Philippines failed mostly on financial criteria and Thailand did badly for a mixture of reasons, he said.
The decision by the fund, which manages US$151 billion in assets, will affect around one billion dollars in emerging market holdings, Calpers said. (AFP)
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