Politikus
2008-10-03 02:05:38 UTC
Too little, too late? :-(
<<< Fast Forward Asia <<<
========
Bursa wants bumiputera shareholding rules relaxed
KUALA LUMPUR, Oct 1 - Bursa Malaysia, the former Kuala Lumpur Stock
Exchange, has asked the government to relax shareholding requirements
that mar the market's attractiveness, industry officials say.
The requirements - which stipulate minimum bumiputera shareholdings -
are said to be making local companies with overseas assets reluctant
to list locally, and driving a growing number of them to go private or
list overseas.
Thirty per cent of a listed company's equity must be set aside for
bumiputeras, but this is not really being contested.
The main point of contention is that should a company top-up its
capital base - say, through a rights issue - regulators can demand
that bumiputera equity be restored to 30 per cent if it has been sold
down. This has always been a concern because shareholders rightfully
complain about earnings dilution.
The bourse wants the rules changed so that once a company is listed
and the 30 per cent bumiputera equity requirement is met, it should no
longer be subject to any top-up conditions.
Industry officials say Bursa Malaysia also wants all sale moratoriums
to be abolished. At present, bumiputeras cannot sell their shares
inside a set time. This disadvantages them in bear market conditions,
whereas non-bumiputeras face no such limitation.
The officials also say Bursa has suggested that if there is no or
insufficient take-up of bumiputera shares, these shares should be
offered to the public instead of being placed in escrow, as they are
now.
They point out that the current bear market has made it extremely
difficult to find investors, as few shares trade above their initial
public offer price.
According to them, only two of the past 12 listings have traded above
their IPO price.
The 30 per cent condition originated with Malaysia's New Economic
Policy, implemented many years ago after race riots.
The policy was originally slated to expire in 1990 but has been
extended to 2020. It seeks to bridge economic disparity between
bumiputeras and richer non-Malays by discriminating in favour of
bumiputeras.
The original aims of the NEP were to eliminate poverty irrespective of
race and to restructure society so no race would be identified with a
specific economic function.
This was to be achieved through targets - specifically, 30 per cent
bumiputera ownership in every sphere of society, from employment and
occupation to house ownership and corporate equity.
Securities industry officials say Bursa Malaysia's proposals to ease
bumiputera shareholding requirements will be considered by the
country's Economic Planning Unit. It isn't clear if any of them will
be approved, as similar suggestions have been made many times in the
past. But this time the suggestions come from an arm of the
government, which will carry more weight.
Also, the proposals are backed by powerful ethnic Malay businessmen
including Nazir Razak, chief executive of investment bank CIMB and
younger brother of Finance Minister and soon-to-be prime minister
Najib Razak. - Business Times Singapore
<<< Fast Forward Asia <<<
========
Bursa wants bumiputera shareholding rules relaxed
KUALA LUMPUR, Oct 1 - Bursa Malaysia, the former Kuala Lumpur Stock
Exchange, has asked the government to relax shareholding requirements
that mar the market's attractiveness, industry officials say.
The requirements - which stipulate minimum bumiputera shareholdings -
are said to be making local companies with overseas assets reluctant
to list locally, and driving a growing number of them to go private or
list overseas.
Thirty per cent of a listed company's equity must be set aside for
bumiputeras, but this is not really being contested.
The main point of contention is that should a company top-up its
capital base - say, through a rights issue - regulators can demand
that bumiputera equity be restored to 30 per cent if it has been sold
down. This has always been a concern because shareholders rightfully
complain about earnings dilution.
The bourse wants the rules changed so that once a company is listed
and the 30 per cent bumiputera equity requirement is met, it should no
longer be subject to any top-up conditions.
Industry officials say Bursa Malaysia also wants all sale moratoriums
to be abolished. At present, bumiputeras cannot sell their shares
inside a set time. This disadvantages them in bear market conditions,
whereas non-bumiputeras face no such limitation.
The officials also say Bursa has suggested that if there is no or
insufficient take-up of bumiputera shares, these shares should be
offered to the public instead of being placed in escrow, as they are
now.
They point out that the current bear market has made it extremely
difficult to find investors, as few shares trade above their initial
public offer price.
According to them, only two of the past 12 listings have traded above
their IPO price.
The 30 per cent condition originated with Malaysia's New Economic
Policy, implemented many years ago after race riots.
The policy was originally slated to expire in 1990 but has been
extended to 2020. It seeks to bridge economic disparity between
bumiputeras and richer non-Malays by discriminating in favour of
bumiputeras.
The original aims of the NEP were to eliminate poverty irrespective of
race and to restructure society so no race would be identified with a
specific economic function.
This was to be achieved through targets - specifically, 30 per cent
bumiputera ownership in every sphere of society, from employment and
occupation to house ownership and corporate equity.
Securities industry officials say Bursa Malaysia's proposals to ease
bumiputera shareholding requirements will be considered by the
country's Economic Planning Unit. It isn't clear if any of them will
be approved, as similar suggestions have been made many times in the
past. But this time the suggestions come from an arm of the
government, which will carry more weight.
Also, the proposals are backed by powerful ethnic Malay businessmen
including Nazir Razak, chief executive of investment bank CIMB and
younger brother of Finance Minister and soon-to-be prime minister
Najib Razak. - Business Times Singapore