Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	KOMPLEKS DAYABUMI, KUALA LUMPUR 
Tarikh/Date 	: 	29/10/85 
Tajuk/Title  	: 	MAJLIS PERASMIAN BURSA KOMODITI 




 Yang Berhormat Dato' Paul Leong Menteri Perusahaan Utama; Yang Amat
Berbahagia Tun Ismail bin Mohamed Ali Pengerusi Majlis Dagangan
Komoditi; Yang Berbahagia Tan Sri Lee Boon Chim Pengerusi Bursa Komoditi
Kuala Lumpur; Dif-Dif Kehormat; Tuan-tuan dan puan-puan sekalian, 

Saya ingin mengambil peluang ini mengucapkan terima kasih kepada Bursa
Komoditi Kuala Lumpur, kerana sudi menjemput saya untuk berucap dan
seterusnya merasmikan pelancaran Bursa ini dengan sistem perniagaannya
yang baru, bertempat di Kompleks Dayabumi yang indah ini.

2. Pada bulan Oktober tahun ini, genaplah usia Bursa ini 5
tahun. Sungguhpun ianya masih muda, Bursa ini telahpun terkenal di
peringkat antarabangsa sebagai sebuah pasaran minyak kelapa sawit yang
ulung di seluruh dunia. Malangnya, dalam tahun 1984, Bursa ini telah
mengalami satu peristiwa pahit yang telah menyekat perkembangannya. Dalam
keadaan seperti itu, saya fikir elok jikalau kita merenung kembali segala
kejayaan dan kelemahan pada masa yang lepas, sebelum kita mengorak langkah
kearah objektif seperti yang telah ditetapkan dahulu itu.

3. Apakala Bursa ini ditubuhkan dalam tahun 1980, objektif Kerajaan dan
pihak swasta sendiri ialah supaya ibu negara Kuala Lumpur dijadikan sebuah
pusat perdagangan komoditi bertaraf antarabangsa. Dengan tertubuhnya Bursa
ini, Malaysia telah menjadi sebuah negara membangun yang pertama yang
mempunyai pasar komoditi moden. Objektif untuk mewujudkan sebuah pasar
komoditi yang moden itu adalah selaras dengan kedudukan negara kita
sebagai sebuah negara pengeluar yang terbesar di dunia bagi beberapa
komoditi seperti getah, minyak kelapa sawit, kayu-kayan, koko dan lada
hitam. Juga, adalah menjadi harapan kita bahawa Bursa Komoditi Kuala
Lumpur ini akan dapat memberi kemudahan pasaran kepada peniaga-peniaga
antarabangsa dari seluruh dunia, terutama peniaga-peniaga dari negara
sahabat dalam ASEAN. Kita tidak lagi terhad kepada Bursa di Eropah dan di
Amerika Syarikat untuk menentukan harga barangan kita. Kita mempunyai
keupayaan mengadakan sebuah pasar komoditi yang bebas dan cekap untuk
menentukan harga barangan bagi pasaran antarabangsa. Adalah menjadi hasrat
kita supaya Bursa Komoditi Kuala Lumpur ini akan terus berkembang dan
dapat memberi kemudahan perniagaan bukan sahaja dalam barangan utama
tetapi juga instrumen kewangan dan indek stok dalam jangka panjangnya.

Ladies and Gentlemen, 

4. Malaysia is a major producer and exporter of several primary
commodities located strategically in the Pacific and ASEAN region. The
ASEAN nations as a whole accounts for about 80% of the world's production
of natural rubber, 60% tin, 90% palm oil, 80% lauric oil, 70% tropical
timber and 45% pepper. In addition, the ASEAN region is also a major
producer of cocoa and other minerals. All these commodities are largely
exported. It is therefore important for us to have an efficient pricing
and marketing system for our commodities.

5. Many of you will recall that the KLCE was established in 1980 with palm
oil as the first commodity traded on the Exchange. Palm oil has to compete
with 16 other vegetable oils and fats throughout the world. Consequently
the prices of palm oil are determined not only by the supply and demand
for it but also those of other vegetable oils and fats in the world
market. Since the establishment of the palm oil market in 1980 we have
witnessed that crude palm oil prices had fluctuated from a high of $2,700
to a low of $630 per tonne. There is therefore a need for producers,
manufacturers, refiners and traders to hedge and protect themselves
against violent price fluctuations.

6. The KLCE should provide this facility. But an exchange of this kind,
however well provided with laws, rules and regulations, cannot by itself
ensure that the purpose for which it is set up will be fulfilled. There
are too many opportunities and loopholes for the unscrupulous and the
irresponsible to take advantage of. Thus the proper functioning of an
exchange of this kind depends really on the ethics and good faith of all
the people involved in the trading. Indeed if one analyses carefully, one
must conclude that what is being traded is the integrity of the
participants. Integrity and good faith are in fact the main capital.

7. Trading in an exchange is a fast process. With modern communication not
only will prices change by the minute but the trading has become a 24
hours a day affair, as traders must take into consideration prices in
markets in other time zones. Together with the fact that deliveries are
required mainly in the future, there is a lot of room for the unscrupulous
to speculate excessively. When these people sustain heavy losses they are
apt to renege on their undertakings. If this is a frequent occurence than
faith in the exchange will vanish, and the exchange will fail.

8. This is why integrity is an important commodity in an exchange. This
being so it is important that the participants are carefully vetted and
are people of some susbtance and reputation. Excessive speculation and
breaches of good faith must be dealt with by the Commission firmly,
impartially and quickly.

9. The efficient functioning of the Exchange and the Clearing House is
critical to the success of the futures market. Both institutions are
linked together in their daily operations. As such, there should always be
an effective line of communication between the Exchange and the Clearing
House so that they could act quickly to deal with any untoward development
which might undermine the integrity of the market.

Ladies and Gentlemen, 

10. The Exchange and the Commodities Trading Commission are endowed with
appropriate powers to act against excessive speculation and manipulation
of the market. The new legislation provides the Commission with the
necessary powers to intervene in the market and to impose speculative
limits and reporting requirements.

11. Manipulation is an offence against the market. The new legislation
treats manipulation as a serious criminal offence punishable with a fine
and imprisonment. Let it be known that we will not tolerate anyone
attempting to undermine the market. It is therefore vital to monitor
developments in the market. The Exchange and the Clearing House being in
the front line to protect the integrity of the market must be prepared to
take appropriate action to prevent any undesirable development in the
market.

Ladies and Gentlemen, 

12. On the regulatory framework, I wish to congratulate the Ministry of
Primary Industries and the Commodities Trading Council for the
comprehensive review of the existing law on commodities futures
trading. The Government and the private sector have worked closely
together to come out with the Commodities Trading Act, 1985, which will
replace the existing Act. Subject to the necessary approval by Parliament,
the Commodities Trading Commission, which will replace the Commodities
Trading Council, will be equipped with appropriate powers to oversee the
operation of the Exchange and the Clearing House in conformity with their
rules and regulations and also to intervene in the market in an emergency
situation, again for the purpose of protecting the integrity of the market
and the public interest. We hope that intervention by the Commission will
be necessary only rarely.

13. The Government recognises that commodity futures trading plays an
important role in our economy. So far, the Government has given financial
assistance in the form of a soft loan amounting to $2.2 million for
start-up expenditure of the Exchange. It is to be expected that during the
initial years, the Exchange and the Clearing House will incur large
expenses for training, promotion and marketing to be undertaken
domestically as well as internationally in order to ensure efficient
running of the Exchange.

14. The Government is also fully aware that a commodity market needs
international participation in order to play its role effectively. In this
regard the Government has agreed to allow international commodity trading
firms to become members of the KLCE and to provide flexibility in the
conditions relating to their equity structure, allowing them to hold more
than 50% equity. We hope that with these incentives and financial
assistance from the Government, the industry will respond positively
towards the creation and development of a viable commodities futures
trading in the country.

15. The Exchange, the Clearing House and the Government have done their
utmost to ensure that the new trading system in the KLCE would run
smoothly in accordance with the philosophy of self regulation. As of
to-day, all contracts traded on the Exchange are automatically guaranteed
on acceptance by the Clearing House. Adequate safeguards are provided to
protect the users of this Exchange and the public. All these changes are
in line with the practices of other commodity exchanges in the world.

16. Let me once again remind everyone that an exchange such as this does
not really trade in material things. It trades on faith and integrity. You
do not see the goods that you are trading in. Indeed in many instances
they have not been produced yet. But because you believe that what you buy
or sell will eventually be produced and delivered, you are prepared to
take the words of a trader that the commodity is or will be there when the
time for delivery arrives.

17. Integrity is the biggest capital in this kind of market. We can have
laws and rules and commissions and councils to keep everyone in line. But
these will not be of any use if a trader is determined to cheat. Hence the
value of integrity. The traders and brokers and all who are involved in
this exchange must have integrity. It is important therefore that everyone
be very carefully screened, that erring members be disciplined and a keen
eye maintained all the time for any sign of manipulation.

18. The exchange is not a plaything or a casino. It is a vital part of a
modern market economy. Those who participate in it must forget their
get-rich-quick ideas. They must regard their participation as a serious
vocation that requires responsibility and ethical practices.

19. The KLCE has entered a new era in commodities futures trading and I
would urge the producers, refiners and traders to make full use of the
market. I also hope that the market would serve the needs of the ASEAN
region and also international traders throughout the world. What the
market has gone through for the past 18 months should serve as a reminder
and lesson for all concerned on the importance of maintaining market
integrity at all times. Equally, it has provided the opportunity to remove
weaknesses and deficiencies through the newly refurbished Exchange and
Clearing House. I am confident that with these awareness and changes, the
KLCE is now in a good position to play its role in making Kuala Lumpur a
major centre of commodity trading in the world.

Tuan-tuan dan puan-puan sekalian, 

20. Dengan ini, saya dengan sukacitanya membuka Bursa Komoditi Kuala
Lumpur ini dengan rasminya.