Dec 12 2006
Everyone – from the exchange to the brokers and public listed companies (PLCs) – has a role to play to ensure that the stock market continues to perform, said Bursa Malaysia chief executive officer Datuk Yusli Mohamed Yusoff today.
“The role of the PLCs is to perform well and do investor relations (IR), the role of the exchange is to make sure the market is safe and orderly and provide the infrastructure for trading.
“Someone in the middle of the chain should be selling the market – brokers, remisiers and institutional sales dealers – while analysts should be writing reports,” he said.
“It is not our job to promote the companies or the exchange. If companies which make millions a year cannot allocate a few hundred thousands for IR, they should remain a private company. Don’t take up space in our system,” he said, citing CLSA’s regional conference, which some invited Malaysian companies did not want to attend and meet investors. “Brokers, please do your job – research and talk to your clients. They are not doing it for free; they earn commission on every trade so I just can’t understand why, for instance, we are not seeing more marketing efforts.
Well said Yusli but I think Bursa Malaysia which is under your command should lead by doing the following:
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Enhance Transparency – how many times have the minority investors got misguided (I guess the word cheated might not sounds polite) when a specific stock was manipulated by syndicate (regardless of insider-linked or not) which drove the share sky-high only to be so-called asked by Bursa Malaysia on the reason for the abnormal price movement. As usual the standard answer from this listed companies are “We’re not aware of any new development which contributes to the price movement“. And what will happen after that? Nothing at all, the cases just vaporize into thin air.
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Allow only companies with Qualities to be listed – Malaysia stock-market were bombarded with too many companies without quality trying to get listed with the main intention of converting their shares into instant cash. Get real, how many of these companies have the long-term plan to benefit all the shareholders (biggest to smallest)? After the first year, the subsequent year seems to deviate (lower) too much from the projected revenue/profit as stated within IPO brochures.
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Heavier punishment – not only should the listed-company which mislead the public be punish, the CEO, CFO, COO and all the C-level officers should be investigated and held responsible for any of their misdeed. Entrusted with the role of good management but used it as a way to enrich themselves above minority shareholders’ interest is equivalent to crime of day-light robbery which entitled to severe punishment. How many minority shareholders lost the only shirt on their body when these companies were declared PN (Practice Notes) and de-listed thereafter?
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Track and Report Insider-Trading – setup a special body to specifically monitor and report any insider-trading which might jeopardize the value of normal shareholders. Learn from U.S. on how they did this efficiently to protect the interest of the public generally and minority shareholders specifically. If the same Enron case were to happen in Malaysia, rest assures the whole Malaysia Stock Exchange will collapse faster than you can blink your eyes.
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Reduce Brokerage Fees for online-trading – why should investors pay the same rate regardless of whether the transaction is being done through brokers or electronically via internet? It doesn’t make sense at all when the brokers are doing nothing but to collect brokerage-fees just because the investors happened to open an account with him. The worst thing is most brokers are not research-oriented – it happens many times that retail investors are more knowledgeable than the brokers themselves about the fundamental and technicality of a specific stock. Don’t trust me? Pick-up the phone and ask your brokers about it now.
There’re many other measures which can be adopted to ensure long-lasting and healthy environment for investors (both locally and foreign) if Malaysia Stock Exchange is serious about long-term investment into the market.
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December 12th, 2006 by financetwitter
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