Malaysia

Overview

Official name : Federation of Malaysia

Government : Federated constitutional monarchy

Head of State : The Yang di-Pertuan Agong (king or supreme sovereign)

Capital City : Kuala Lumpur

Main towns : Kelang, Ipoh , Petaling Jaya, Johor Baharu

Land area : 330,113 sq km

Population : 31.53m (2018 est.)

Climate : Tropical

Currency : Ringgit (ISO currency code: MYR)

Exchange rate : USD 1 = MYR 4.18 (August 2020)

Measures : Metric system with gradual conversion from UK (imperial) system. Local measures include: 1 pikul=25 gantang=60.48 kg, 1 koyan=40 pikul=2.419 tonnes

Language : Malay, Chinese, English, Tamil, Itan Dusan, Bajau and others

Time : Peninsula : 7 hours ahead of GMT; Sabah and Sarawak : 8 hours ahead of GMT

Regulatory Scheme

Bank Negara Malaysia (BNM) acts as the central bank of Malaysia . Malaysia maintains a liberal system of exchange controls. BNM handles foreign-exchange controls, regulates international transactions and monitors the payment and settlement systems. There are no limits on the import of foreign currencies by residents or non-residents. Permanent residents are allowed to make payment to non-residents for purposes of investing abroad, up to M$10,000 or its equivalent in foreign currency per transaction.

Banking

Malaysia has a fully developed range of commercial banks, investment banks and finance companies. Malaysian banks are required to provide loans "at reasonable cost" to priority sectors (i.e. groups owned by ethnic Malays or other indigenous peoples), low- cost housing and small-scale enterprises. Following problems with NPL's and the Asian financial crisis of 1997-98, the government established new agencies to help banks and regulate money lending. In 1999 BNM reduced the number of locally owned commercial banks, merchant banks and finance companies from 58 to 10, and 50 of Malaysia 's 54 domestic banks had agreed to merge into ten groups.

Stock Exchange

The Malaysian stock exchange is located in Kuala Lumpur and it is referred to as the Bursa Exchange (Formerly the KLSE). The government was seeking to transform Kuala Lumpur into a regional financial center, having introduced a range of measures to liberalize the capital market. Their efforts have been largely unsuccessful as a result of bail-outs of politically well connected entrepreneurs to the detriment of minority shareholders and other questionable market practices during the Asian financial crisis. In 2001 the 10% levy on the repatriation of profits from portfolio investments held for less than one year was repealed. There has been a recent push to strengthen and add depth to the corporate bond markets and derivatives markets, and also to develop the venture capital industry. Foreign majority ownership of unit trust companies is also permitted. In 2001 the exchange launched a new derivatives exchange called the Malaysian Derivatives Exchange (MDEX) by merging the COMMEX and the KLOFFE.

Insurance

The Malaysian insurance industry is regulated by the Insurance Regulation & Supervision Departments of Bank Negara Malaysia (BNM). The Minimum paid-up capital for all direct insurers is MYR100mn, the minimum margin of solvency is MYR50mn, and the Admitted asset ratio is 90%. Foreign ownership of existing insurers is limited to a maximum of 51%, and 30% for entry of new foreign companies respectively. There are around 35 domestic non-life insurers of which about half are either foreign or majority foreign owned. The share of top 5 non-life insurers is around 33% of gross premiums. The major lines of non-life business are motor (44.1%) and fire (19.4%). There are about 16 life insurance companies of which about half are foreign owned. The share of top 5 life insurers is about 77%. The market share of foreign life insurers (including majority foreign-owned) is about 85%. The major lines of life insurance business are whole life (39.2%), endowment (24.3%) and investment-linked (16.9%) products.