Najib to unveil investment rules end-June

Published: 2009/06/16

MALAYSIAN Prime Minister Najib Razak will make “significant announcements” related to his plans to ease restrictions on foreign investment, the nation’s stock exchange said.The announcements after a review of the Foreign Investor Committee guidelines will be made in a speech during the Invest Malaysia conference in Kuala Lumpur on June 30 and July 1, Bursa Malaysia Bhd chief executive officer Yusli Mohamed Yusoff told reporters in Singapore today, while promoting the event.

“We are expecting him to make some significant announcements in line with his liberalization and transition reform agenda,” Yusli said. “The review of the FIC is going to be one of the significant items in his speech and that will have an impact on foreign investor activity.”The Kuala Lumpur Composite Index has climbed 23 per cent this year. The gauge is the worst performer among Southeast Asia’s six biggest benchmark indexes even after Najib, who took office on April 3, announced stimulus plans valued at RM67 billion.

“We’ve allocated more money into Malaysia just this week because it’s been a forgotten market,” said Roger Groebli, Singapore-based head of financial market analysis at LGT Capital Management, which oversees $80 billion in assets globally. “The politicians have it in their hands and there’s a lot of hope now on the prospects for the market.”

TakeoversYusli said he sees potential for more takeovers because of a drop in valuations. This year’s gains in the market, which tends to be less volatile than its peers, are “in line” with the exchange’s expectations and investors can still find opportunities, Yusli said.The Kuala Lumpur index’s 39 per cent slump last year was the smallest among the Southeast Asian countries.

Malaysia’s government will review the guidelines on foreign investment, Najib told reporters on April 17. He has already raised foreign ownership limits at non-commercial banks and said the nation will let in more overseas lenders for the first time in more than a decade.Bursa Malaysia yesterday said it plans to start a multi- currency trading platform on July 13 that will support non- ringgit securities transactions.

Investment banks may introduce an exchange traded fund denominated in U.S. dollars that may be based on plantation indexes that were started by Bursa and FTSE Group last month, Yusli said.A surge in trading this quarter will have a “very positive” effect on the bourse’s earnings, Yusli said in a June 4 interview with Bloomberg Television. Shares of Bursa Malaysia have climbed 39 per cent this year.