FOREIGN OWNERSHIP IN STOCKBROKING FIRMS RAISED TO 70 PCT

KUALA LUMPUR, June 30 (Bernama) -- Foreign shareholding limits in existing
stockbroking companies will be increased to 70 percent from the current 49
percent in efforts to further enhance Malaysia's position as a listing and
investment destination, Prime Minister Najib Razak announced here
Tuesday.

He also announced that with immediate effect, the Foreign Investment
Committee (FIC) guidelines covering the acquisition of equity stakes, mergers
and takeovers were repealed without any new guideline in place.

"The FIC would no longer process any share transactions nor impose equity
conditions on such transactions," he said.

Ownership in the wholesesale segment of the fund management industry would
also be fully liberalised to allow 100 percent foreign ownership for qualified
and leading fund management companies to establish operations in Malaysia, he
said.

Najib, who is also Finance Minister, said that for the retail segment,
foreign shareholding limits for the unit trust management companies would also
be raised to 70 percent from its current level of 49 percent.

Najib said this when announcing a comprehensive deregulation of investment
guidelines administered by the FIC encompassing acquisition of equity stakes,
mergers and takeovers, treatment of fund raising by listed companies and
acquisition of properties at the "Invest Malaysia 2009" conference.

As to changes in the role of the FIC, he said that "this represents a major
rationalisation of FIC regulation. Up till June 29, processing such
transactions was the mainstay of FIC (but) from June 30 this function of FIC
ends."

Najib said that the treatment of fund raising by listed companies has also
been significantly enhanced towards raising Malaysia's attractiveness as a
listing destination.

Currently, he said companies seeking listing were required to satisfy the
public shareholding spread requirement of 25 percent based on Bursa Malaysia’s
listing rules and also the Bumiputera equity condition based on FIC guidelines.

Going forward, he said the public spread requirement remains and in
addition, the Securities Commission would introduce a new guideline which
requires companies seeking listing to offer 50 percent of the public
shareholding spread to Bumiputera investors.

"The Bumiputera (son of soil) equity condition therefore becomes subsumed
within the public spread requirement," said Najib.

He said this reinforces the competitiveness of Malaysia Stock Exchange
(Bursa Malaysia) as a listing destination as promoters of companies seeking
listing would no longer need to divest equity beyond that required to satisfy
the public spread requirement.

The Prime Minister said that in addition to further easing rules on raising
funds from the capital markets, post listing fund raising exercises would no
longer be subject to any equity condition.

"This deregulation will immediately support existing listed companies
seeking to raise funds to undertake investment and reduce the friction cost of
compliance," he said.

This new requirement to offer 50 percent of public shareholding spread to
Bumiputeras applies only to Malaysian companies seeking listing on Bursa
Malaysia.

"The current guidelines for foreign companies to seek listing without any
need for compliance with any equity conditions remain and we have seen several
foreign companies successfully applying for listing in Malaysia as a result," he
said.

Najib also announced that a new investment institution called Ekuiti
Nasional Bhd (Ekuinas) would be established.

Ekuinas would be set up as a private equity fund, with an initial capital of
RM500 million. (US$1=RM3.52)

Ekuinas, which would subsequently be enlarged to become a RM10 billion fund,
would focus its investments in sectors with high growth potential, in
line with supporting the New Economic Model, said Najib.

At the same time, he said that Ekuinas would invest jointly with private
sector funds in order to promote genuine partnership and a fully commercial
approach.

-- BERNAMA