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Economic reforms â€“ One step forward, one step back .. and watch the implementation

Posted by admin

Thursday, 02 July 2009 18:20

By Analyst at Large

The mainstream media has been trumpeting liberalization measures announced by Prime Minister Datuk Seri Najib Razak at the InvestMalaysia Conference on Tuesday.

Amid the plethora of measures, the one that stands out is removal of the 30% bumiputera quota for companies seeking listing in Malaysia. It is a bold political move indeed, to eliminate this “something for nothing” crutch.

Having said that, the actual impact to bumiputeras is minimal. The pipeline of new listings has hardly been inspiring in recent years. I challenge you to name even one recently-listed prominent company. Also, the policy had been a huge failure in terms of its intention to build bumiputera wealth. PM Najib said RM54bn had been allocated to bumiputeras (I think it is a lot more), but only RM2bn remains. So, bumiputeras kept less than 5% of the amounts allocated to them!

But it is good news, in that it removes a huge impediment to listing. Many owners of successful businesses shied away when told they had to offer 30% of their company to a new “partner” at a large discount. Let’s hope this results in more and better quality listings on Bursa, which would make the stock exchange more attractive and help fuel trading volume.

I am dismayed though, that replacing this 30% quota is another new fund. The RM10bn Ekuinas fund is supposed to invest in “bumiputera companies and entrepreneurs, based on merit”. Such government-run funds have awful records. And what is Ekuinas going to do that existing institutions do not?

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written by Commonsenses, July 03, 2009 00:02:36

RM10bn Ekuinas fund is a sunk fund called grants, subsidies or venture capital. Whatever the name is, its a give away money from tax payers. MTC and bionexus are past examples of freebies.Most of the socalled techs are actually foreign ideas repackage and sold to the government for freebies. Its no wonder that our country are always poor.

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written by temenggong, July 03, 2009 08:32:33

Ekuinas is another giveaway scheme. We'l be reading about it later when these bumi companies report huge losses.'That's' that money given away. PNB and PUNB were such earlier schemes, and quite successful in 'giving away'. In between the 'giving' and 'the reporting of looses', we'll see senior officers of these companies driving Mercedes and lunching in clubs, discussing ways and means to 'giveaway'.

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