This was one of the new measures to stimulate the stock market, Najib said at the World Capital Markets Symposium 2018 in Kuala Lumpur. The event was organised by the Securities Commission.

According to Securities Commission chairman Ranjit Ajit Singh, there are sufficient safeguards to ensure intraday short selling.

“Many countries have similar frameworks like this, but you are still required to have a borrowing arrangement in place. We do not allow naked short selling at all,” Ranjit said at a press conference after speaking at the symposium.

What the announcement means is that any person can engage in short selling provided that person has obtained a Stock Borrowing and Lending agreement (SPL) from a broker.

Presently, only proprietary day traders, such as remisiers, can short sell. Short selling involves the sale of stock that is not owned by the seller or which the seller has borrowed.

In 2006, it was reported that Malaysia had partly lifted its ban on short-selling of shares, introduced during the 1998 Asian financial crisis.

The ban on short-selling was one of the first measures introduced in 1998 by then prime minister Dr Mahathir Mohamad to help curb an outflow of capital.

Asked if the announcement by Najib meant that the government had completely lifted the ban imposed in 1998, Ranjit said: “That is the wrong line of thinking and people must dissociate themselves from that thinking.

“Overall short selling arrangements have already been in place in the Malaysian market. Short selling arrangements that we have called Regulatory Short Selling (RSS) just requires you to ensure that you have your Stock Borrowing and Lending agreement (SPL).

“This has been in existence for many years now. More recently we allowed intraday short selling in the exchange for proprietary day traders. We only allowed intraday, which means you have to close out your position by the end of the day.”

There was strong interest in intraday short selling by many industry participants and investors, he said, adding: “This is a gradual liberalisation of the market.”