Malaysia launches financial hub for Kuala Lumpur

KUALA LUMPUR (Reuters): Malaysia launched a new financial centre for Kuala Lumpur on Monday that it said had already attracted more than $1 billion in investment and would boost the country’s bid to become a centre for trade and finance.

The creation of the Tun Razak Exchange, named after Prime Minister Najib Razak’s father, who was also prime minister, comes after a series of high-profile initial public offerings that have made Kuala Lumpur the most active Asian centre for stock debuts this year.

The hub in Kuala Lumpur, which has the world’s biggest Islamic bond market, would create half a million jobs directly and indirectly and was expected to attract more than 100 “top global companies”, partly through special tax incentives, the government said.

“We want to have a new business and financial hub that brings in the east and west together. One that can grow both Islamic and conventional finance,” said Lodin Wok Kamarrudin, chairman of the board of directors at state-owned strategic development firm 1Malaysia Development Bhd.

Najib said in a speech that the development had already secured a foreign “strategic investor” that had pledged 3.5 billion ringgit ($1.1 billion) for the project. The identity of the investor and further details will be announced in September.

The project, which spans 70 acres (28 hectares) near the capital’s Petronas Twin Towers is part of Malaysia’s $444 billion Economic Transformation Program (ETP) aimed at making the Southeast Asian country a high-income nation by 2020.

The ETP has been criticised by some analysts who say it has lagged in attracting private sector investment and has been over-optimistic in some of its projections.