Malaysia gears up to remove barriers to foreign investors

Malaysia will relax foreign bank ownership rules, issue more licences and loosen short-selling regulations as it seeks to triple the size of its financial sector by 2020, the central bank said. The Southeast Asian country will also let companies actively manage foreign currency fluctuations and allow non-residents to trade onshore interest-rate derivatives as it seeks to deepen its money market under a 10-year plan announced by Prime Minister Najeeb Razak in Kuala Lumpur yesterday. "The gradual removal of barriers for overseas investors will result in a level playing field and make the local financial market more competitive," Abdul Jalil Abdul Rashid, who helps manage $3 billion as CEO at Kuala Lumpur-based Aberdeen Islamic Asset Management Sdn, said yesterday. "We have reached the stage where a lot of the local banks are already strong and can give foreign banks a run for their money." Bank of China Ltd, BNP Paribas and Sumitomo Mitsui Banking Corp were among lenders that won permits under the central bank's 10-year Financial Sector Master Plan published in 2001.