Malaysian capital mart needs spark to boost appeal

Source From (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/wrap30/Article/

Published: on 31 May 2012

KUALA LUMPUR: The slew of announcements at this year's Invest Malaysia underscored a growing sense that the capital market needs an edge as greater liberalisation sets in region.

The plan for Bursa Malaysia Bhd to set up a foundation to address growth gaps in the market, with special focus on the growth of small- and medium-sized companies, will help build the country's competency and capability to compete.

Malaysia will also create a Capital Market Task Force, headed by the Finance Minister II, to ensure an efficient, effective and facilitative marketplace.

All eyes will be on whether, together, they may address problems or gaps that could help make Malaysia become a more attractive listing destination, for example. For now, big foreign companies going for a listing in this region seem to favour Singapore and Hong Kong.

The government's announcement on tax breaks for companies that train graduates and bring women back to work demonstrated its commitment to developing and optimising local talent.

As Talent Corp chief executive officer Johan Merican pointed out, getting companies to re-hire women is not a "welfare or corporate social responsibility" measure. It simply addresses the fact that women form a core part of Malaysian talent as they make up over 60 per cent of the enrolment in public universities.

At Prime Minister Datuk Seri Najib Razak's surprise dialogue session with the 2,000-odd participants of the conference, he hinted that the 30 per cent foreign shareholding cap on banks may be raised in the new future provided there was reciprocity in the region.

Analysts feel this provides a case for Singapore's DBS banking group to eventually enter into local lender Alliance Financial Group. "In return, the Singaporean government could potentially grant the likes of CIMB Group a Qualifying Full Bank operating licence that will significantly relax the restrictions on its number of permitted branches and service locations from two to 25," OSK Research noted.

The initiatives, five in all, announced by Najib at the event may not have been as market-moving or headline-grabbing as those of the previous years, but it has become clear that Invest Malaysia is no longer the main platform he uses to make big, splashy announcements.

Such announcements are now staggered over the year, along with regular updates on the Economic Transformation Programme.