Towards a Liberal Malaysian Market
PM Najib today introduces sweeping changes to its capital markets to boost foreign investments, cutting Bumiputera equity quotas for share offerings and in fund management firms while trimming the role of a powerful but conservative panel overseeing such investments.
These changes are primed to ease restrictions on foreign investment and become a major initiative to make it easier to do business in Malaysia, he said.
Najib announced the changes in his speech at the Invest Malaysia conference in Kuala Lumpur this morning.
The prime minister said the changes are a result of a review of the Foreign Investor Committee guidelines.
Some of the changes:
- Guidelines on the acquisition of equity stakes, mergers and takeovers have been repealed with immediate effect, without any new guideline in its place;
- There is a change in the requirements of bumiputera equity for companies seeking listing. Previously a company seeking listing was required to satisfy a public spread requirement of 25 percent and 30 percent bumiputera equity condition, but the equity condition is subsumed within the public spread requirement with 50 percent of public shareholding spread to bumiputera investors.
- Post-listing fund-raising exercises will no longer be subjected to any equity condition.
- FIC approval for property transactions will now be required where it involves a dilution of bumiputera or government interests for properties valued at RM20 million and above. All other property transactions, including those between foreigners and non-bumi will no longer required FIC approval.
"The scope and function of the FIC have been substantially rationalised. FIC's scope now involves far fewer transactions, far fewer rules and far fewer conditions," Najib said.
He also announced other new measures, which include:
- Setting up a new investment institution, called Ekuiti Nasional Berhad (Ekuinas), in order to promote the participation of bumiputeras;
- Redefining the roles of government-linked companies to play a complementary role to the private sector and to avoid detriment of private sector competition;
- Ownership in the wholesale segment of the fund management industry will be liberalised to allow 100 percent foreign ownership for qualified and leading fund management companies to establish operation in Malaysia;
- For unit trust segments, the foreign shareholding limit will be raised from 49 percent to 70 percent;
- Foreign ownership shareholding limits in existing stock broking companies will be increased from 49 percent to 70 percent;
- Bank Negara and the Security Commission will review all visa applications for the financial services industry and capital market industries.
Credits: Malaysiakini, The Star and The Malaysian Insider