RATE OF FDI INFLOW SHOWS RISING TREND, LOWER HOUSE OF PARLIAMENT TOLD

KUALA LUMPUR, Nov 29 (Bernama) -- The rate of foreign direct investment (FDI)
inflow to Malaysia this year showed a rising trend, Deputy Finance Minister
Donald Lim Siang Chai told the Lower House of Parliament Monday.

He said FDI recorded a RM11 billion surplus compared to RM3.5 billion the first
half of 2009. (US$1=RM3.15)

"The trend of rising FDI inflow is supported by the government's continuous
effort and the conducive business environment as well as the gradual recovery of
global capital expenditure," he said in reply to MP Khairy Jamaluddin.

He said most of the FDI inflows to Malaysia went to the manufacturing and
services sectors, particularly the finance and insurance sub-sectors as well as
technology-related sectors, from the United States, the Netherlands and Japan.

The net inflow of portfolio investment also recorded a surplus of RM23.4 billion
compared with a deficit of RM22.5 billion in the same period last year.

"Portfolio investment improves, boosted by strong economic fundamentals and the
prospect of higher corporate earnings in Malaysia. Most portfolio funds are
invested in the local debt and equity markets.

"The big inflow reflects the trend in countries in the region and the
recovery of foreign investors' sentiment towards the prospect of Malaysia's
economic growth besides the strengthening in ringgit value," he said.

The major portfolio investors were from Europe and Asia, he added.

Lim said that it was expected that investment activities could be enhanced and
could indirectly draw foreign investment following various measures under the
Government Transformation Programme, Economic Transformation Programme as well
the implementation of 10th Malaysia Plan.

He said this would also help increase and strengthen international reserve
position.

Meanwhile, he said, several discussions were held involving government agencies
and business associations including from insurance and takaful players from
August to September to identify and seek their support to implement initiatives
to enhance efficiency and transparency in the motor insurance claim process.

Lim was replying to MP Salahuddin Ayub about insurance firms refusing to give
third party coverage for motor vehicles above 10 years of age.

He said Malaysia's Central Bank and the Finance Ministry were drawing up a
proper mechanism to ensure people get access to motor insurance coverage at
reasonable prices.

He said a follow-up consultation with various parties including consumer
associations, transport bodies, the Bar Council and insurance and takaful
industry players would be held before the proposed mechanism was forwarded for
government consideration by early next year.

Besides, to give the public continued access to motor insurance particularly
third party coverage, the insurance industry had unanimously agreed to provide
motor insurance coverage through the Malaysian Motor Insurance Pool (MMIP).

"The loss incurred by MMIP is shared among all general insurers. As insurer of
last resort, MMIP cannot reject applications from vehicle owners for motor
coverage," he said.
-- BERNAMA