Malaysia remains fragile despite China power deal

Hong Kong

MALAYSIA is getting another sovereign lifeline. State-owned China General Nuclear Power will buy the energy assets of troubled sovereign fund 1Malaysia Development Berhad (1MDB) for RM9.83 billion (S$3.3 billion). That is a big step towards solving 1MDB's debt troubles. But it will do little to ease the pressure on the currency or on embattled Prime Minister Najib Razak, who also chairs 1MDB's board of advisers.

1MDB is selling the power plants, which stretch from Malaysia to Pakistan, for around 18 per cent less than the equity value it paid for them between 2012 and 2013.