How much does it costs Malaysian Stock Exchange from the recent sudden privatization of which quality companies were taken out from the listing? A whopping RM 46.3 billion has been wiped out from Bursa Malaysia’s market value in the first half of the year from the 17 firms who opted to call it quit. The consolation – RM3.74 billion in market capitalization was injected from the listing of 16 new companies in the same period, a small figure of less than 10% compare to the withdrawal.

Nevertheless, you have to salute the local stock exchange when they are still adamant and believe its normal phenomenon and not something peculiar. Bursa Malaysia Securities Bhd chief legal officer Selvarany Rasiah was reported by BusinessTimes as saying that the privatisation of these companies signals a very mature and robust Malaysian financial market, with a favourable credit market.

She said the fact that no companies have de-listed to re-list on a new market also proves that Bursa Malaysia has not lost its attractiveness. That is indeed a bold statement considering that some of the companies which is undergoing the privatization actually has plan to re-list in other stock market and my bet would be on Maxis Communications Berhad (KLSE: MAXIS, stock-code 5051). No prize for guessing which equity market will the company be listing in the near future.

With the latest being AmInvestment Group Bhd being taken private by parent AMMB Holdings Berhad (AMMB : stock-code 1015) with the offer of RM 3.70 per share (a premium of 15.6 percent from the last traded price of 3.20 ringgit), the trend is set to continue for some time.

The fact remains that no matter how many new companies being approved for new listing, the quality of these companies are nowhere near the big-boys who decided to pull-out from the local equity market. Quantity might be the replaceable entity but the quality is something which is as rare as diamond when you talk about picking great stocks to invest.

How come I didn’t hear anything from the once outspoken Bursa Malaysia (KLSE: BURSA, stock-code 1818) chief executive officer Yusli Mohamed Yusoff? He’s still around alive and kicking, isn’t he?

Other Articles That May Interest You …

• Privatization Gaining Momentum – Junk Stocks Left

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June 20th, 2007 by financetwitter

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