Business

Friday April 24, 2009

KLCI up on news of removal of equity ruling

By LOONG TSE MIN


KUALA LUMPUR: Malaysian stocks rose in line with a regional market rally yesterday and on feel-good sentiment after the Government announced on Wednesday the removal of the 30% bumiputra equity requirement for 27 services sub-sectors.

The benchmark Kuala Lumpur Composite Index (KLCI) rose more than 1% or 10.06 points to 978.64 led by select blue chips.

Genting Bhd was up 20 sen to RM4.72, Malayan Banking Bhd added eight sen to RM4.40, Axiata Group Bhd advanced four sen to RM2.02 and Sime Darby Bhd gained five sen to RM6.45.

“The announcement definitely had an impact on the market,” said OSK Investment Bank head of research Chris Eng. “But it is a broad-based impact on the market. It will not affect any particular stock unless for those companies (affected by) the bumiputra (shareholding) requirement.”

However, the local stock market was still largely following external developments, he added.

One dealer said “there is positive general sentiment in the market that the Government is pro-active and sending the message that 30% bumiputra ownership is not necessary in all sectors.”

“But the market is trying to get hold of who will be the beneficiaries,” the dealer noted, adding that investors were also eager to know about further liberalisation in the financial sector hinted at by Prime Minister Datuk Seri Najib Tun Razak.

“Why dangle the carrot? The foreign banks are already operating here. What will the liberalisation of (equity ownership) in the financial sector be?

“The market has not deduced how to react,” he said.

Meanwhile, stock markets in the region rallied strongly yesterday.

Japan and Hong Kong indices surged mainly on local factors, pulling up most other Asian exchanges.

Japan’s Nikkei 225 jumped 119.71 points or 1.37% to 8,847.01 led by Toyota following a re-rating of the stock, and also on reports that Honda Motor Co plans to invest in electronics company Pioneer.

Hong Kong’s Hang Seng shot up 336.01 points or 2.26% to 15,214.46 largely attributed to bargain hunting after a two-day slump.

Singapore shares closed 0.9% higher as investors picked up bargains following recent declines.

The blue-chip Straits Times Index added 16.57 points to end at 1,859.98.

What captains of industry say

TAN SRI LEE KIM YEW

Vice-Chairman,

Country Heights Holdings Bhd

IT will be easier to talk to foreigners without that 30% equity requirement. When foreign companies seek out opportunities in Malaysia, they always bring up the 30% protection.

It will create more interest if a Malaysian company wants a foreign partner but the world economy is not very good today, so let’s see what the impact will be.

HO HOY SUM

General Manager,

OneWorld Hotel

THERE is no impact on us because we are a private company. Most of the hotels are owned by locals. However, the hotels are managed by foreign hotel operators.

This means they charge a management fee based on a contract. Malaysian hotel rates are too low and the yields are not attractive. In addition, we charge in ringgit.

DATUK RAMESH RAJARATNAM

Executive deputy chairman,

Malaysian Merchant Marine Bhd

I BELIEVE the move is a step in the right direction. In fact, this is part of what the business community has been asking for all these years.

The move can help reduce corruption, in the sense that it minimises the opportunities for people to manipulate the earlier system.

And I can see that the move could help improve transparency, which is important as we are part of the global economy.

Additionally, we will have less explanation to do now when dealing with international companies, as previously they could not understand why we have such a requirement in the first place.

MICHAEL DE KRETSER

Chief executive officer,

GO Communications Sdn Bhd

KRETSER, who is of Australian nationality, said he had local partners who currently held minority stakes in the public relations agency.

“It all helps when you have a local partner for this particular industry, especially when you go for Government business. For a lot of good reason, it’s always advisable to have a local partner,” he said.

Nonetheless, Kretser said the move would not have a direct impact on the company but he believed it was a good step for the future development of the Malaysian economy, particularly in the communications industry.

MARCUS LAI

Country Manager,

3Com Asia Ltd

AS an MNC, we are not affected by the bumiputra equity ruling even prior to the Government’s decision to remove the 30% bumiputera equity. We have been planning to incorporate a local private entity (Sdn Bhd) here and we’ve received the approval.

I believe more MNCs will be encouraged to incorporate local subsidiary here with the recent move by the Ggovernment.

It will be more transparent and fair. This move will also create a more level playing field and provide equal opportunities.

BERNARD CHIANG

Asean south general manager (enterprise business),

Nortel Networks Malaysia Sdn Bhd

NORTEL has always recognised the value of running a business in Malaysia, that’s why we are launching Agile Communication Environment to help drive business growth in this country.

For us, creating value and helping companies to achieve their business goals is top priority, and we will continue to focus on doing what we do best as a leader in the telecommunications sector.

For latest Bursa Malaysia indices, charts and other information click here

Latest NYSE, NASDAQ and other business news from AP-Wire

  • E-mail this story
  • Print this story
  • Bookmark and Share