http://biz.thestar.com.my/news/story.asp?file=/2005/3/30/business/10547867&sec=business
Wednesday March 30, 2005 Firms to compete for investments BY JAGDEV SINGH SIDHU AND SIDEK KAMISO BURSA Malaysia expects Malaysian investors to start investing more money abroad following the relaxation of rules regarding investments, said CEO Yusli Mohamed Yusoff. Yusli said companies have to improve themselves to compete for investment money in the future. He does not expect investments in overseas assets to start immediately and he believes the bulk of money will, however, remain in Malaysia. "It is good for Malaysian investors because they will be able to diversify their holdings. I don't anticipate a rush of funds out because I don't think our investors are familiar with many markets overseas, so there will be a learning process,'' he said. "Overall, it is a healthy development. We want to see further deregulation and liberalisation eventually in our market and only then can we see the market perform optimally.'' Yusli expects outflows to be channelled through institutional funds and will rely on professionals, who will also need time to familiarise themselves with markets abroad. The Government last week announced a slew of measures aimed at deregulating and liberalising the capital market by allowing five foreign brokers to set up operations in Malaysia and to permit unit trust companies to invest 30% of their net asset value overseas. Yusli said the relaxation of investment rules meant that companies on Bursa Malaysia would have to compete with international companies for investors' funds. "Overall, it should be positive for the whole market. If you are benchmarked against regional companies and you are not performing, then you should expect your valuations to become more realistic,'' he said. Yusli said the five foreign brokers that were given the nod to start operations in Malaysia would raise the profile of the KL market among global investors and their sales teams would have the incentive to promote the Malaysian market to their clients. "Secondly, we hope they will introduce new products that have been successful in other markets. We have already met a few firms which have asked us about our rules and processes for them to introduce new products,'' he said. Yusli believes that the foreign brokers would also have an effect in improving human capital within the industry and the local professionals would be exposed to international best practices. Another offshoot of the announcement is that the electronic trading link between the Malaysian and Singaporean stock markets would mean that Malaysian investors would be able to buy stocks in Singapore. "It will facilitate greater flows both ways. Under the previous policy, it would have meant more inflows from Singapore than from here. So we are not sure whether the balance will change now,'' he said. "My guess is that Singaporean investors are probably more familiar with our market than Malaysian investors with the Singaporean market, so initially there might be greater inflows into our market but as far as the exchange is concerned, we will be structuring the whole to make it a win-win situation for both exchanges.'' On the prospects of Bursa Malaysia declaring a bumper dividend after the company's listing, Yusli said: "Our business model is quite simple. As with other exchanges around the world, it is quite a strong cash generating business and you can see on our balance sheet that we have quite a bit of cash.'' He said Bursa Malaysia, which has RM850mil in cash after its IPO, would have to put its cash to good use to generate value for shareholders and there were not many alternatives on how to use that cash if that can't be done. http://biz.thestar.com.my/news/story.asp?file=/2005/3/30/business/10547876&sec=business S&P to open KL office as part of regional expansion STANDARD & Poor's is expected to open its office in Kuala Lumpur within this year as part of the group's expansion in the region, managing director for Asia, Surinder Kathpalia, said. "We are looking for S&P to extend its suite of services to Malaysian market," Kathpalia said at The Star-S&P 2005 Malaysia Fund Awards 2005 in Kuala Lumpur yesterday. It is understood that the move would give the global credit agency a wider coverage of Malaysian companies. S&P provides independent credit ratings, indices, risk evaluation, investment research, data and valuations. Established more than 140 years ago, the company has identified Asia-Pacific as its critical growth area, given the continuing development and growth in the region's financial markets. In Malaysia, S&P recently signed an agreement with Rating Agency Malaysia to co-ordinate their analytical and business development activities in Malaysia. The company currently has more than 6,000 employees in Malaysia. S&P is actively assisting Asian banks in their preparation for Basel II Accord compliance. The company considers Malaysia as its key market in view of the growing debt market in the country. It had previously served Malaysian clients from Hong Kong and Singapore. ------------------------ Yahoo! Groups Sponsor --------------------~--> What would our lives be like without music, dance, and theater? 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