Government-linked plantation companies will be consolidated to bring more big players into Malaysia's share market, said Second Finance Minister Datuk Dr Jamaludin Jarjis.
What we are going to do is to merge or consolidate them to become big like Tenaga Nasional Bhd (TNB), so that they can become index-linked (counters) and all foreign investors and local people can buy their stocks, he said.
The government was also encouraging companies in the private sector to consolidate as well and join the big players in the market, he told Bernama after the first 2003 Commonwealth Speaker Series on Wednesday night.
He said foreign companies, which had large funds, would not want to invest in small local firms.
Now with the mergers, there will be more big players in the market and this will encourage foreign investors to buy stocks in these companies, he said.
Commenting on Valuecap Sdn Bhd, an asset management company equally owned by government agencies Khazanah Nasional Bhd, Permodalan Nasional Bhd and Kumpulan Wang Amanah Pencen, he said these players had pooled their expertise to tap opportunities in the market.
Valuecap entered the market on Jan 10 with the objective of buying shares that had fundamental value but were under-priced.
These institutions have more funds, with their pension funds or business funds, so they got together and pooled their management to advise us on how to tap the stocks which are undervalued,'' Jamaludin said. We encourage institutions like these to get together, which is good for the market.''
Moreover, he said, with the existence of companies like Valuecap, even if there were adverse external factors, it would not affect the local bourse as much.
With companies like Valuecap, we now have many players in the market and we are sure the liquidity is there, Jamaludin added.
The Commonwealth Speaker Series is a new initiative by the Malaysia-Canada, Malaysia-Australia, Malaysia-New Zealand and Malaysia-South Africa Business Councils.
Jamaludin, the first speaker in the series, spoke on Malaysia: Why You Should Put Your Money Here.
Also present at the function were Deputy Finance Minister Datuk Chan Kong Choy, acting Canadian High Commissioner to Malaysia Leslie James, and president of the Malaysia-Canada Business Council Roger Poulin. Bernama