NEM Opening Up More Opportunities For Private Sector Investors

March 30, 2010 18:07 PM

NEM Opening Up More Opportunities For Private Sector Investors

By: Ramjit

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KUALA LUMPUR, March 30 (Bernama) -- As anticipated, the New Economic Model, (NEM) unveiled by Prime Minister Datuk Seri Najib Tun Razak Tuesday morning, will open up more opportunities for private sector investments with the plans to divest stakes in several government-linked companies.

Bursa Malaysia Bhd'S chief executive officer, Datuk Yusli Mohamed Yusoff, said the announcement of further divestment of the government's non-core assets and allowing the Employees Provident Fund to increase its investment overseas to create more room for new investors in the domestic market was in line with what had been proposed to the government.

He said Bursa Malaysia hoped to see the free float of listed companies increase by more than 50 per cent in the future but it would not make it mandatory as the current level 25 per cent was adequate.

There should also be more good strategic investors who can add value to businesses to come into the market, not just portfolio business, he said.

The EPF which invested six per cent of its assets offshore, will be allowed to increase significantly its investment overseas to diversify its portfolio and create more room domestically for new participants, Prime Minister Datuk Seri Najib Tun Razak said when he unveiled the NEM at the Invest Malaysia 2010 conference, here Tuesday.

Khazanah alone in the last nine months divested significant stakes in Tenaga Nasional Bhd, Malaysia Airports Holding Bhd and PLUS Expressway Bhd for the purpose of increasing the liquidity of these counters, Najib said, adding that more progress in such divestments must be made.

Yusli said the stock exchange was also keen to see the transformation under NEM taking place quickly.

"The economic model is very relevant for Malaysia. I don't see why anyone would not want to participate in it because who does not want high income. So I don't see how anyone would not agree to it," he said when asked to comment on NEM at Invest Malaysia 2010.

He said the new environment would create new businesses and expand existing ones for Bursa Malaysia.

The exchange's current framework is very adequate now but if there is room for improvement it would be done, he said.

On the issue of Bumiputera equity in public listed companies, he said the Prime Minister was aiming for a more inclusive society which would gain from the NEM.

"All Malaysians have roles in participating in investment opportunities. That's the principle proposed," Yusli said, adding that no one will be marginalised.

He said more investment opportunities would raise the wealth of all Malaysians and the Bumiputera community being the majority, would also certainly benefit.

Meanwhile, the Director General of Institute Of Strategic and International Studies (ISIS), Datuk Dr Mahani Zainal Abidin, said the NEM had been specially formulated to take care of the interest of the country and its people.

She said foreign investors will be more confident with the transparency and approach the government has taken in the NEM and therefore find Malaysia more attractive as an investment destination.

On the corporatisation of Malaysian Industrial Development Authority (MIDA), Dr Mahani said it should have been done earlier as it had the role of promoting Malaysia as an investment destination and it had to compete with other agencies.

Corporatisation would enable MIDA to promote Malaysia from a better platform and the authority to compete better with other foreign agencies, she said.

It will help MIDA make decisions faster, she added.

On the move to allow EPF to increase its investment overseas, Dr Mahani said it was a good move as the Malaysian stock market was very small.

However, investment overseas must be made in a cautious manner to safeguard the country's interest, she said, adding that EPF can look into countries such as China, India, as well as emerging markets and developed countries.

Meanwhile, MIDA's former director-general Datuk R Karunakaran, said the corporatisation of MIDA was something that it had sought for years.

This empowerment will enable MIDA to deliver faster approvals and decisions on foreign direct investments (FDIs), he said.

"It will go a long way to attracting FDI and promoting domestic investment. Hopefully, the implementation of it is also hastened," he said.

As for revitalising the private sector, he said not enough had been done in this direction as government-linked companies (GLCs) were competing with private companies.

"It is better to allow the private sector to thrive and contribute to the development rather than the GLCs and agencies cramping the style of the private sector," he added.

Datuk Nicholas S. Zefferys, President of American Malaysian Chamber of Commerce, said the changes under NEM were not only for the present time but also for the future.

"It's an excellent change in the Malaysian government, which I believe would attract more confident foreign investors to Malaysia. It's a successful framework," he said.

There had been too much government intervention in the past which had created barriers for further development of Malaysia.

"It (barriers) basically just held Malaysia back. But now, opening the economy to more foreign investment is a fundamental change that I believe investors would welcome," he said.

Proton Holdings Bhd's Managing Director, Datuk Syed Zainal Abidin Syed Mohd Tahir, expressed hope that under the National Key Economic Activities (NKEA) the automotive and transportation sector will be given some focus.

He said Proton was more interested in the green technology as it was developing new initiatives such as the hybrid cars.

"We have to work with the government closely to value add," he said.

Meanwhile, Minister in the Prime Minister's Department, Tan Sri Dr Koh Tsu Koon, said the basic principle of NEM was for Malaysia to move forward and become competitive to attract more investments and generate growth.

The approach is a balanced one as it is inclusive, he added.

As for revitalising the private sector, the difference now would be the transformation programme which has initiated a different way of delivering things, he said.

"We are beginning to see some results with the Special Taskforce to Facilitate Business (Pemudah) and Performance Management & Delivery Unit (PEMANDU)," he said.

He said the standard of education was also a primary concern and the government was going all out to attract talents locally and overseas.

"But the real test will be executing the transformation plans," he added.

Malaysian Investors Association President Datuk Dr P.H.S. Lim meanwhile said Malaysia should put its resources into higher productivity, reduce corruptions, strengthen the ringgit value, aim for better job distribution among all its people, and provide better opportunities for higher education and scholarships.

He said the government should also help local manufacturers achieve higher automation, while cutting down foreign workers and creating a more harmonious environment for co-living.

-- BERNAMA

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