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ETP ANNUAL REPORT 2011
Entry Point Projects
EPP 1
Revitalising Malaysia’s Equity Markets
The capital market is a vital link in the financial services
infrastructure. Various issues confront Malaysia’s equity markets
today including low turnover velocity and trading volumes in
relation to its peers, as well as shrinking liquidity.
EPP 1 seeks to resolve this by targeting the expansion of Bursa’s
market capitalisation at a compounded annual growth rate (CAGR)
of 15 per cent to RM3.9 trillion by 2020 from RM1 trillion in 2010.
Liquidity, measured by trading velocity, is also targeted to improve
from 31 per cent of total market capitalisation to 60 per cent, in line
with regional averages. This EPP is expected to create incremental
GNI of RM3.3 billion and 9,000 additional jobs by 2020.
Khazanah Nasional Bhd is the lead agency to manage the equity
holdings of Government-linked investment corporations (GLICs)
in listed companies with a view of paring down non-core holdings
to improve the stock market’s liquidity. Another key initiative will
be the listing of key privately-held Government-linked companies
(GLCs) to further boost stockmarket liquidity and the number of
large cap stocks.
Khazanah Nasional is the lead agancy to manage the equity holdings of GLICs in
listed companies
Achievements
In April 2011, Khazanah Nasional Bhd sold 32.21 per cent of its
strategic stake in Pos Malaysia Bhd to DRB-Hicom Bhd at RM3.60
per share or RM622.79 million. This was followed by the listing
of two large PETRONAS subsidiaries: Malaysia Marine and Heavy
Engineering Holdings Berhad (MMHE) and PETRONAS Chemicals
Group in 2010 and was followed by the listing of MSM Malaysia
Holdings Bhd, FELDA’s sugar refining arm in 2011.
A total of 33 companies under six GLICs have been identified
as ready for divestment either through a listing, pare-down or
outright sale. Five have been identified for stake pare-downs,
seven for public-listing and 21 for outright sale. For 2011 –
2012, 24 companies have been identified for the Government’s
divestment exercise; the divestment exercise will begin once
their share prices hit pre-determined prices.
In 2011, there were three foreign listings on Bursa Malaysia. They
are Maxwell International Holdings Bhd (local incorporated, China
based, listing date: 6 Jan 2011, market capitalisation: RM216
million); Mclean Technologies Bhd (local incorporated, Singapore
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based, listing date: 10 May 2011, market capitalisation: RM61
million); Ideal Jacobs (M) Corporation Bhd (local incorporated,
China based, listing date: 18 May 2011, market capitalisation:
RM32 million).
Bursa was upgraded within the FTSE’s Global Equity Index series
from secondary emerging to Advanced Emerging in June 2011.
Malaysia’s latest weightage in the MSCI Emerging Markets Index
has increased from 2.9 per cent to 3.2 per cent after staying at
the 2.9 per cent weightage for the past 2 years. In addition to
this, Malaysia’s weightage in MSCI AC Asia excluding Japan has
also risen to 4.4 per cent from 4.1 per cent.
Bursa Malaysia has partnered with Chicago Mercantile Exchange
(CME), the biggest derivative exchange in the world. This will allow
global traders to access the Bursa Malaysia derivative products
electronically, especially the Crude Palm Oil Futures (FCPO) market
facilitating a robust derivative exchange.
As at third quarter of 2011, the Securities Commission (SC)
approved 12 applications for Initial Public Offering (IPO) in the
Main Market which are expected to have a total combined market
capitalisation of RM18.33 billion and expected to raise more than
RM5.5 billion. In addition, Bursa approved seven applications
for IPOs for the ACE Market which are expected to have a total
combined market capitalisation of RM0.5 billion and expected to
raise more than RM0.1 billion.
As at Q3 2011, SC approved 12 applications for IPO in the Main Market.
Photo courtesy of Star Publications (Malaysia) Bhd
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