FOREIGN firms with Malaysian operations see the latest relaxation of rules by the Securities Commission (SC) to allow them to seek a direct listing on the KLSE as a welcome development, but many are not about to take up the offer just yet.
Most of the foreign incorporated companies said listing on the local exchange would undoubtedly offer them an additional avenue to raise funds, but they had to wait for instructions from their head offices before making any such decision, and this could take a while.
Of the companies that StarBiz has contacted so far, only two are exploring and/or are committed to a listing on the KLSE, following the rules relaxation.
These are Orix Leasing Malaysia Bhd and the CNI group of companies. We are exploring the idea of listing the company on the KLSE, said Orix Leasing Malaysia deputy managing director Lim Beng Chor.
The SC's move is a positive sign for the market. The economy would certainly like to see foreign-owned companies listed on the KLSE as this would allow the public to participate in the market and retain foreign direct investments (FDIs) longer in the country.
CNI Enterprise (India) Pte Ltd senior manager (operations) Dr S. Subra told StarBiz by telephone from Bangalore that the Malaysia-based CNI group of companies would be listed on the KLSE next year.
He sees the SC's move as a step in the right direction to boost the country's economic growth.
With imminent globalisation, Malaysian companies can venture abroad while their foreign counterparts will list in Malaysia, resulting in greater spin-offs in the various sectors of the economy, he said.
Experts are of the view that the larger multinationals should explore this option as well. One cited the Matsushita group of companies, which currently has some 28 subsidiaries operating in Malaysia.
Thus far, however, only one subsidiary, Matsushita Electric Company Bhd (Melcom), is listed on the main board of the KLSE. Matsushita could not be contacted for comment.
The SC announced last Friday that foreign incorporated companies with Malaysian operations would be allowed to seek a direct listing on the KLSE in a move to make the ex- change more globally competitive.
The SC identified four types of previously barred companies that could now be listed.
Commenting on the SC's decision, the Malaysian International Chamber of Commerce & Industry (MICCI) president Tengku Zainal Rashid Tengku Mahmood said: The move is a long-term strategy to attract more FDIs to Malaysia in the face of stiff competition from other lower- cost producing countries.
It is a good policy and we intend to promote the concept to the international market.''
He said, however, that the type of companies involved should ideally be of high value, offering specialised skills in niche sectors like information technology.
The MICCI has some 1,000 members representing about 550 multinational companies and 450 Malaysian companies.
Nokia (M) Sdn Bhd managing director Barry T.W. Lee said while he viewed the SC move positively, such an option needed to be evaluated from various angles.
We have to balance such a move with the local people and development programmes and have the right mix in terms of transfer of technology, he said.
BMW Malaysia Bhd press and corporate affairs manager Vijayaratnam Tharumartnam said the government had chosen the right timing to introduce the new listing rule.
Given Malaysias stability both politically and economically, the move certainly strengthens the view that the country is a good place to invest in.
We believe the move is not an isolated one as it comes after the government announced tax incentives for foreign companies to set up their operational headquarters here. These two measures certainly will help foreign investments locally, he said.
With regard to a local listing for the company, he said: The decision is up to the groups corporate planners in Germany.
Another foreign company that StarBiz spoke to was Satyam Computer Services Ltd of India, whose senior vice-president (Asia Pacific) Virender Aggarwal, said the group has no plans to seek a listing on the KLSE yet as it is already listed on the New York Stock Exchange.
A senior official of Samsung SDI (Malaysia) Bhd said although the company had received approval for a KLSE listing in 2000, the plan was shelved due to market conditions.
He said the company had yet to revive this plan as it had sufficient capital to support its operations.
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