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Malaysians protest move to bolster stock market

Malaysians protest move to bolster stock market

Malaysia's largest labor union and opposition leaders Thursday denounced government plans to inject 5 billion ringgit (US$1.4 billion) into the stock market, saying they fear public funds could be misused to bail out ailing, well-connected companies.
The government earlier this week said it would double the size of state agency ValueCap Sdn. Bhd. to US$10 billion (US$2.8 billion) to invest in stocks regarded as undervalued because many fundamentally strong companies were trading at low prices.
It has said the national pension fund would provide a 5 billion ringgit loan to Valuecap.
But the Malaysian Trades Union Congress, which represent some 500,000 workers, said the Employees Provident Fund is the custodian of people's money and "not the ATM for the government" to bail out state-linked firms.
"This is the hard-earned money of the workers, their retirement plan. How is this bailout plan going to benefit the workers?" it said in a statement.
Opposition leader Anwar Ibrahim said the additional money was merely 1 percent of market equity and would have no impact on the bourse which has plunged by more than 37 percent this year.
It "serves no logical purpose other than to prop up some companies in the stock market," he told reporters in Parliament.
Lim Kit Siang, head of the opposition Democratic Action Party, said Valuecap has operated in secrecy since it was set up in 2003 and that its accounts have not been audited.
"This are the people's money. In order to ensure that this is not a bailout...there should be a public scrutiny" of Valuecap's accounts, he said.
The union and opposition leaders said there was no guarantee that the pension fund would profit from the loan to Valuecap given the weak market conditions.
"We want proof that this 5 billion ringgit will not go down the drain," the MTUC said.
The move to bolster the stock market was part of government measures to help improve sentiment and boost the economy amid the global financial downturn. The government has said it may have to cut its 5.4 percent growth forecast for 2009.