KUALA LUMPUR, March 25 (Bernama) -- Bursa Malaysia's Main Board and the Second Board will be combined into one catering for big established companies while the Mesdaq market will be revamped for smaller companies in efforts to improve the equities market, Prime Minister Datuk Seri Abdullah Ahmad Badawi said Tuesday.
The streamlining of the board structure by merging the main and second boards would establish a unified board for more established companies with strong track records, he said when announcing several measures to further improve the Malaysian equities market and make it more attractive for foreign investors.
The revamp of the Mesdaq market will allow relatively smaller companies to access the equities market at an earlier stage of their life cycle, Abdullah said in his keynote address at the "Invest Malaysia 2008" annual conference here Tuesday.
He said the unified board will have uniform listing requirements, and comprehensive disclosure-based regulation with easy entry and fast removal.
The prime minister also said access to the unified board will be premised on sufficient level of disclosures and corporate conduct of the companies and promoters.
For the revamped Mesdaq, he said the listing of emerging companies will be sponsor driven where advisers will play a greater role in bringing listings to the market and maintaining ongoing supervision.
"By reducing the number of boards and the amount of listing requirements, we will help to catalyse more high-quality listings to add to the vibrant and dynamic nature of our equities market," he added.
Abdullah, who is also the Finance Minister, said the government will establish a market-making framework for Bursa Malaysia.
Market-makers could include proprietary traders in commercial and investment banks as well as foreign traders. "They will be obliged to be present in the market at all times, to provide liquidity for the market," said Abdullah, adding that this initiative will help price discovery, promote innovation and enhance liquidity in the market.
To spur interest among financial institutions to act as the market-makers, Abdullah said the government will offer incentives such as tax concessions and lower fees.
As for the bond market, the government will liberalise the bond market approval framework to increase efficiency and competitiveness, he said at the conference attended by over 600 local and international delegates featuring over 30 corporations.
At present, there is already a "green-lane" process for bond offerings made by highly-rated bond issuers.
Such issuances are deemed approved, which means issuers will only be required to submit their applications to the Securities Commission as a matter of formality.
"Moving forward, we will extend this "deemed approved" process to all domestic or foreign issuers who are rated "AAA" from domestic rating agencies or a minimum "BBB" rating by international agencies," the prime minister said.
He said the government will also extend this process for the issuance of non-ringgit bonds by all local and foreign issuers with a minimum "BBB" rating by international agencies.
"We believe that these measures will enhance the breadth of our bond market, and consolidate Malaysia's position as a leading bond and Sukuk market within the Asia-Pacific region," said Abdullah.
The Prime Minister also announced that the government will allow the establishment of a third credit rating agency in the country to ensure better supervision and add competition.
The rating agency would be allowed to have up to 49 percent foreign equity.
Currently, the two rating agencies in the country are Rating Agency Malaysia Bhd and Malaysian Rating Corporation Bhd.
-- BERNAMA
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