PM to remove 30% requirement for IPO requirements

From the Business Times:

On Malaysian companies seeking a listing on Bursa Malaysia, he noted that they would previously have to sell a 30 per cent stake to Bumiputeras and also ensure a quarter of the shares are held by public investors.

From now on, however, with the 30 per cent rule scrapped, companies only need to offer half of the public spread to Bumiputera investors.

This effectively means that Bumiputeras will hold at least 12.5 per cent in initial public offerings.

"I think this is a good, bold move.

It should bolster market sentiment and in the mid-to-long term, small investment banks will benefit from doing more fund-raising exercises,"said Chris Eng, head of research at OSK Investment Bank, of the new move.

Najib stressed that he remained committed towards enhancing economic participation by Bumiputeras.

The listing requirements for the Bursa Malaysia are effectively reduced to just 12.5% from 30%. It's a chore to find these Bumiputra Investors and a burden to the companies that want to list. The companies would have to offer Bumiputra investors a lower price to entice them to invest, which a lot of them would just sell off after the IPO after making a quick buck.

Prime Minister Najib has been relatively quiet on how he wants to develop the country ever since he took the post a few months ago. We will probably see a lot of deregulation in the fianancial indsutry as his brother is the CEO of the largest investement banks in Malaysia.

Some people speculated that Prime Minister Najib might follow in the more command style of leadership as former PM Mahathir, but I don't think so.

I think that we should look at his brother, Nazir Razak, as he will surely be advising Najib who I believe is uncomftable with the economic direction of the country. It's not his background. Nazir Razak runs his company, CIMB, like any competitive corporate entity.

Deadweights are cut off and the top performers stay just like in any world class investment bank. So, he believes in competition, and definitely not free handouts, in which the NEP will most likely see abolishment. I'm sure Nazir Razak believes in free economy and any barriers to trade should be removed.

Nazir Razak has Najib's ear and will definitely convey a more open and modern, forward looking style of development. Look for existing barriers to economic prosperity being dealt with and a more competitive and open society.