KUALA LUMPUR, 30 June 2009: Foreign shareholding limits in existing stockbroking companies will be increased to 70% from the current 49% in efforts to further enhance Malaysia’s position as a listing and investment destination, Prime Minister Datuk Seri Najib Razak announced here today.
He also announced that with immediate effect, the Foreign Investment Committee (FIC) guidelines covering the acquisition of equity stakes, mergers and takeovers is repealed without any new guideline in place.
“The FIC would no longer process any share transactions nor impose equity conditions on such transactions,” he said.
Ownership in the wholesale segment of the fund management industry would also be fully liberalised to allow 100% foreign ownership for qualified and leading fund management companies to establish operations in Malaysia, he said.
Najib, who is also Finance Minister, said that for the retail segment, foreign shareholding limits for the unit trust management companies would be raised to 70% from its current level of 49%.
Najib said this when announcing a comprehensive deregulation of investment guidelines administered by the FIC encompassing acquisition of equity stakes, mergers and takeovers, treatment of fund raising by listed companies and acquisition of properties at the Invest Malaysia 2009 conference.
As to changes in FIC’s role, he said that “this represents a major rationalisation of FIC regulation. Up till yesterday processing such transaction was the main stay of FIC (but) from today this function of FIC ends.”
Najib said that the treatment of fund raising by listed companies has also been significantly enhanced towards raising Malaysia’s attractiveness as a listing destination.
Currently, companies seeking listing are required to satisfy the public shareholding spread requirement of 25% based on Bursa Malaysia’s listing rules and also the bumiputera equity condition based on FIC guidelines.
Going forward, the public spread requirement remains and in addition, the SC will introduce a new guideline which requires companies seeking listing to offer 50% of the public shareholding spread to bumiputera investors.
The bumiputera equity condition therefore becomes subsumed within the public spread requirement.
This reinforces the competitiveness of Bursa Malaysia as a listing destination as promoters of companies seeking listing will no longer need to divest equity beyond that required to satisfy the public spread requirement.
Najib said that in addition to further easing rules on raising funds from the capital markets, post-listing fund raising exercises would no longer be subject to any equity condition.
“This deregulation will immediately support existing listed companies seeking to raise funds to undertake investment and reduce the friction cost of compliance,” he said.
This new requirement to offer 50% of public shareholding spread to bumiputeras applies only to Malaysian companies seeking listing on Bursa Malaysia.
“The current guideline for foreign companies to seek listing without any need to compliance with any equity condition remain and we have seen several foreign companies successfully applying for listing in Malaysia as a result,” he said.
Najib also announced that a new investment institution called Ekuiti Nasional Bhd (Ekuinas) would be established.
Ekuinas will be set up as a private equity fund, with an initial capital of RM500 million.
Ekuinas, which would subsequently be enlarged to become a RM10 billion fund, would focus its investments in sectors with high growth potential, in line with supporting the New Economic Model, said Najib.
At the same time, Ekuinas would invest jointly with private fund managers in order to promote genuine partnership and a fully commercial approach. — Bernama