BY YAP LENG KUEN
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PUTRAJAYA: The Government announced 10 measures, including new guidelines for the listing of large companies, aimed at further enhancing the Malaysian capital market.
The other measures include reduction in stamp duty, standardisation of board lots, merger of government-linked companies and reduction of moratorium and initial public offering (IPO) processing time.
The measures will also see Foreign Investment Committee approvals to be processed by the Securities Commission, the introduction of performance incentives, and enhancing capital markets skills and the role of intermediaries.
Acting Prime Minister Datuk Seri Abdullah Ahmad Badawi said the capital market plays an important role in economic development and acts as an effective conduit for the raising and investment of capital.
QUESTION TIME: Datuk Seri Abdullah Ahmad Badawi, who is also the Acting Finance Minister, speaking at a press conference in Putrajaya Tuesday while Jamaludin listens.
Abdullah, who is also acting Finance Minister, outlined the following measures which forms part of the Government’s overall effort to ensure continued growth of the economy and an efficient, resilient and competitive capital market.
Stamp duty to be capped at RM200 per contract with effect from Monday. This measure will result in a reduction of more than RM60mil per year in government revenue but it is hoped that trading will be further enhanced on the KLSE.
Standardisation of board lots at 100 shares per lot. Second board counters will standardise into 100 shares per lot in April, followed by the main board counters in June.
New guidelines for the listing of large companies – from April 1, companies with a minimum market capitalisation of RM250mil and after-tax profit of RM8mil for the latest financial year will be exempted from the three-to-five years’ profit track record requirement. However, the existing five-year operating history requirement remains.
Merger of government-linked companies to increase the presence of large premier companies on the KLSE.
While he would not prescribe which were the companies to be merged, Abdullah said mergers of some government-linked firms in the plantation or construction sectors would boost the KLSE.
“It will take a bit of time. Market players and investors will respond,” said Abdullah. “We also expect foreign investors to respond.”
Reduction of moratorium on promoters’ shareholdings for all new IPOs/reverse takeovers to one instead of four years.
Reduction in IPO processing time to less than three months from six to eight months currently.
FIC approvals to be processed by SC: This applies in cases where app-rovals by both the authorities are required.
Introduction of performance incentive schemes for management staff at government-linked companies.
Enhancing capital market skills with a graduates training scheme, under which participants will receive classroom training for a month and an 11-month attachment with participating organisations.
Enhancing the role of intermediaries – brokers and remisiers are encouraged to step up their efforts to develop the market and help eliminate undercutting. A framework for the setting of minimum commission rates, seen as an effective policing mechanism, will be worked out within a month by the SC, KLSE and the Asso-ciation of Stockbroking Companies Malaysia.
While these steps represent efforts to improve the long-term competitveness of the capital market, the Government is expected to come up with a separate stimulus package for the economy by the end of the month.
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