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TIPS for Stock Market – Free-Up Shares Float



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Jun 08 2007
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Malaysian stock market will be a better place to invest should the government take the advices from top officials from the major world indices. BusinessTimes reported that the top guns are advising the government to take steps to increase the free float and liquidity levels on its stock market if it wants to attract more foreign funds.

Deborah Yang, the executive director of MSCI Barra said “Free float is a key issue for Malaysia. It’s difficult for global investors to come in to a market with very little free float. Malaysia’s free float, or shares outstanding that are available for trading, has remained roughly the same over the last10 years, at between 42 and 49 per cent, whereas it is over 50 per cent in other regional markets like Singapore”
Asia-Pacific FTSE managing director Paul Hoff said “Government should look towards selling down more of its stakes in listed companies to improve free float and liquidity. Malaysia government must also work towards building a bigger and better market as there is expected to be major growth in pension funds here.”
Richard Zhang, a senior director of business development at Standard & Poor’s said “Liquidity is something that market participants look at very closely. The market (here) is not active enough”
So, there you are Malaysian government, the free tips which you’ve been searching high and low on how to attract more foreign investors into the country. If you still wanted to keep floating shares low simply because you’re too scared of foreigners snapping your equity, you might as well take all the pet-stocks private, not that privatization is something new in Malaysia. Have the stocks such as Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347) or Telekom Malaysia Berhad (KLSE: TM, stock-code 4863) put up a better performance compare to Public Bank Berhad (KLSE: PBBANK, stock-code 1295) despite being the sole player who monopolize the respective sector?
You can argue till the cows come home that most of the low floating shares are of national interest but that doesn’t justify why you want to float the shares at the first place, not to mention that Singapore could do so. Wouldn’t it be better for the government to take private all those sensitive and “national interest” listed companies such as Malaysia Airline System (KLSE: MAS, stock-code 3786), Proton Holdings Bhd (KLSE: PROTON, stock-code 5304) or even PLUS Expressway Berhad (KLSE: PLUS, stock-code 5052).
Since most of these companies are “making money” *evil grin*, privatization will ensure the government can milk all the profits year-in-year-out. Learn from Ananda Krishnan, will you? Market volatility due to sufficient shares float is one of the ingredients for investors to make money.


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You got a great site with very informative contents!

Regards
Dave Wong
http://www.SuccessEnroute.com
http://www.Success-Route.com

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