KUALA LUMPUR, Malaysia (AP) -- Malaysia took a big step Tuesday to liberalize its economy, relaxing a host of restrictions on foreign investment, including a controversial rule requiring businesses to be partly owned by ethnic Malays.

Prime Minister Najib Razak announced that listed companies will no longer be required to allocate 30 percent of their stake to Malays as part of an affirmative action program for the country's ethnic majority !!!!

Any ideas guys ~~

well, my french friend would be happy to hear this. many foreigners wish to do business and stay in malaysia because they are comfortable with the environment, but turned-off by the bumi-equity thing

I hope the term "FULL control" doesnt rile up certain parties and making them assume "100% control of ALL businesses" will go to the non-bumis,leaving none for them eventually.

There's a catch though.

Source: Malaysia Insider
I think he's just doing it in the hopes of appeasing some of the non-Bumis. But if he really was interested in fair play, there wouldn't be that 50% thing. But I guess it's 1 big step forward, 1 small step back.

SIGH.... THAT IS THE REASON WHY WE ARE SO MUCH BEHIND TO OTHER ASIAN COUNTRIES.....
ALL THE FOREIGNERS WERE BACK OFF BY ALL THESE RULEZ AND GO TO SINGAPORE. CHECK ON OUR STOCK EXCHANGE TOTAL VALUE.. SO PATHETIC.......

koht04, 10 years ago, every one was complaining about too much mobile capital. Investments from foreigners who suddenly pulled out cause the collapse in '97.

We're only way behind when compared to Singapore. Look at Indonesia and the Philippines.

Wah, another BS.

there is ntg special... why should we giv bumi 30% quota in company ? if they able to run bizness , open own company and dont depend on ppl....

mahathir should throw away bumi tongkat longtime ago ....

'Datuk Seri Najib Tun Razak dropped the 30 per cent Bumiputera equity requirement for Malaysian firms seeking public listing, the cornerstone of the New Economic Policy (NEP), but they will now have to offer 50 per cent of the public shareholding spread to Bumiputera investors.'

Don't really understand what this means. Does it mean that at every moment of time there must be at least 50% public bumi shareholders? Like if the company has issued 1 million shares at KLSE, then 500k should be bumi? If the criteria not met how?

What's the catch...? hmm


However, these companies are now required to offer 50% of the public shareholding spread to bumiputra investors.

“The 30% requirement remains but it is a macro objective,” Najib said.

Last Time: 30% of your company must be bumi-owned to qualify for listing, hence you see those public-listed companies having a bumi director, etc.

Now: you can list your company but after that, make sure that 50% of the shares are owned by bumis, i.e. now the shares are spread among many public shareholders - no individuals with controlling stake like before.

It's also less strict because you can say that you've offered by the bumis are not interested, your stocks have low liquidity, major shareholders unwilling to sell ...blah, blah, blah. Mesdaq companies are also required to have certain amount of public spread, but they always get away with such excuses.

MAYBE HE JUST TALK ONLY ..REAL OR NOT ALSO NOBODY KNOW..

This post has been edited by x132755: Jun 30 2009, 03:17 PM

Does that mean if company 1 has 1,000,000 shares, 500,000 must be own by bumi persona?

Xuzen

Everytime a company listed on IPO, they won't sell on the entire stake of shares to the public, it could be 25% or 30% or 40% of the whole company paid up capital. Major shareholders generally still hold large chunk of stake.

So previously, the rule is that, bumi must have 30% stake of the whole company before can be listed, now new rule said, the 25% or 30% offered to the public portion, 50% of it must be offered to bumi. That is.

So if bumi portion not fully taken up, (high possibly, as it didn't state in the news, so I put a high possibly which is just as same situation for bumi lot in properties) the rest will be offered to all.

---

Added on June 30, 2009, 3:26 pmIt depended on how much shares are offered to the public in the first place when IPO,

A company has 1 million shares, they won't offer 1 million share to the public one.

If the company offer 500K shares to the public, then 250k shares will be offered (not owned as according stated in the news) to the bumi.

So whether bumi fully took up or not, is another story.

This post has been edited by cherroy: Jun 30 2009, 03:26 PM

well if put that way, it doesn't sound bad at all

What is bumi don't buy the shares? eg ASM, only a few bought. But ASM had a quota for individual, if no quota maybe the rich malays will buy up all.

rich malays buy all, turn back one round, still back to square one, still the same, majority of malay ethic are poor

apparently it looks pretty convincing...

that's not unusual.. the worst it can go... non-bumi continue to feed bumi... that's it.

Poor bcos they are being spoon fed all these time. I don't mine if the gov teach them how to fish. But not supplying buckets of fish to them, and then slowly reducing the supply. this will kill them. But of course not all bumis are dependent on gov, some are more aggressive & hardworking than other races.

i still dont quite understand actually. For example all the bumis who got the 50% IPO decided to sell their share later on.. how are they gonna keep track and make sure the shares are passed on to bumi ? Is this rule only applies to IPO ?

If bumi or non bumi portion is not fully subscribed and they are not allowed to cross buy... isnt this an disadvantage to the company ?

Irzani,

Why??

Every single tax paying non-bumi is contributing tax to help bumi. Majority of the tax money is used for the benefit of BUMI ONLY.

Dreamer

No really sure if this is any carrot for foreign investors.. but it certainly sounds like more liberalisation towards locals who are non-bumi. But, for those non-bumi who have funds, they already have Alibaba agreement and they're pretty happy with the arrangement.

But the problem here is the new 50% public share spread offer requirement to bumi, which it is still a wrench/spanner in archaic 'racial' based system that we know doesn't work for the past 40 years - just wondering how does the govt intend to regulate this.

For those who hasn't setup shop yet, yeah, big deal, no min 30% equity race-based distribution needed but without more change in bidding/procurement process or doing business with the govt itself, not really sure if it means anything.

AFAIC, Malaysia can continue its 30%/50% equity for all she wants.. because it doesn't matter to the foreign investors or MNCs anymore.

There are other neighboring countries that already have offered better incentives without any kind of restriction.
I am not sure Malaysia still compete with the lower costs (and better technology) already offered by neighboring countries.

The non bumi are minority, they will feel safer living in malaysia and their wealth protected,
if they help the majority to be more competitive. Otherwise the government cannot gurantee all the privileges the minority is enjoying now.

50% offer is for the IPO only.

After the IPO, there is no condition other than the 25% shares must be public spread. So it is good for a lot of companies now like DIGI who I believe still does not meet the requirements.

Family owned companies who wanna get listed will have less restrictions, meaning they do not need to give a certain percentage to non- family members to meet the requirements.

As far as I know, these are just for public listed companies. MNCs as before should not be affected at all unless they decide to list their local operations like Shell and Esso. This is good for them because they can keep most of the directorships under their own appointed management team.

Edit: I'm more interested in current companies which have met the 30% quota. Does it mean they can reduce it from now on?

Edit: Ahh got my answer here already. Current companies now has no requirements to keep the 30% quota.

The Star highlights

This post has been edited by skiddtrader: Jul 1 2009, 08:34 AM

Some good managed bumi cos may attract some non bumi ( major stake ) equity participation.

Virtually they ( non bumi ) could take over the companies if they want.

Cos such as YTL may be looking for something that is relevant to their businesses.

The Question is whether local non bumi could buy up a major stake in GLC co such as TM, Tenaga and Axiata.

They would not rush , but rather waiting for opportunity to buy.

Just my personal opinion only.

This post has been edited by SKY 1809: Jul 1 2009, 08:59 AM

SKY 1809,

Why would people want to buy money losing business?? Or, 90+% environment??

Dreamer

Dreamer,

Well, if you are in charge of the management team, then the chance of making money is most likely.

The trouble is to how do without political interference calling for protection of the " weak" ones ?

This post has been edited by SKY 1809: Jul 1 2009, 11:20 AM

So now Genting, PBB , YTL other non-bumi company can take over PNB ..

Since this is a finance section, please be more focus on finance and equity related to the issue, as this measure is related to IPO and listed company only.

Any specific racial issue can be discussed in RWI, as don't want this topic become a purely racial talk.

Thanks for the cooperation.

Well I think its a good move to liberalise the market a bit. Investors who are turned-off earlier by the prospect of giving away as much 30% of their major shareholding have now no more worries.

The quota was also rumoured to be the obstacle to US FTA with Malaysia. Maybe after this, the deal can be closed.

probably the conclusion is the jerung will get more shares to buy and bilis just can see them rattle all fat fish
The rich get richer, poor get ..?

This post has been edited by mmusang: Jul 1 2009, 02:41 PM

for i perspective, it is not about bumi and non-bumi...... we need to attract more n more foreigners to invest in our country lar come on...... everything is getting globalize...... we need lot and lot of capital to prosper our country... more job opportunity... more money flow in ....

i have to agree with koht04, perhaps this change is more focussed on attracting foreigners to invest in our country, especially the middle easterners!

i also don't foresee any changes in the non-bumi companies of trying to divest their wealth outside the country...especially in current political climate.

why would u compare with someone who is so way behind malaysia back in 196x ?

malaysia which is once on par with singapore, hongkong is now behind. korea once behind malaysia is wayy ahead of malaysia now.