KUALA LUMPUR, March 28 — The direct impact from the Ukraine-Russia conflict towards the Malaysian capital market is still manageable given the country’s minimal exposure to both parties, the Securities Commission Malaysia (SC) said.

Chairman Datuk Syed Zaid Albar said, however, the possibility of more severe impact remains as there is no clear indication on how the conflict will end.

"As we have witnessed, the impact (of Ukraine-Russia conflict) is already felt in various market segments worldwide, especially in commodities.

"The possibility of a more severe impact remains given the potential for further escalation and the lack of a clear resolution that we have seen so far,” he told a virtual media briefing on the SC Annual Report 2021 announcement today.

When asked on the capital market outlook for this year, he said the capital market will be premised on the baseline expectation of a sustain economic recovery this year.

"This is through the normalisation of businesses and services as well as the reopening of (country) borders, which is expected by this Friday.

"The recovery will support corporate earning and generate positive sentiment generally. However, we must note that this outlook must be subject to considerable uncertainty and many external risks, such as the ongoing conflict in Ukraine,” he said.

Syed Zaid said the other key risk drivers include global supply chain disruptions, given the Covid-19 related developments and the pace of global monetary policy tightening.

"As such, we expect market volatility to remain especially in the near term. The SC will continue to monitor the market for any signs of excessive market stress and take the necessary action,” he added. — Bernama