PM Announces New Investment Rules

There are a few major changes in the investment guidelines following the move to liberalize the market. These changes includes abolishing the Foreign Investment Committee and also the introduction of Ekuinas. It is reported that a new set of guidelines will be introduced by one of the department under the Ministry of Prime Minister.


Now, listed companies are no longer required to comply with the 30%-Bumi equity requirement rule and as a result, Ekuinas is set up, which is a brand new investment institution aiming at stimulating participation of Bumiputera in the investment field.


News report from The Star:

KUALA LUMPUR: The Foreign Investment Committee (FIC) guidelines covering the acquisition of equity stakes mergers and takeovers is repealed immediately without any new guideline in place.

Prime Minister Datuk Seri Najib Tun Razak also said that FIC would no longer process any transaction or impose equity conditions on such transactions.

“I am pleased to announce a comprehensive deregulation of investment guidelines administered by the FIC,” he said that as part of a slew of liberalisation measures on the Malaysian capital market that will have the same impact as the banking and services sector.

The other two guidelines encompass treatment of fund raising by a list of companies in the acquisition of properties, he said in his keynote address at the Investment Malaysia Conference in a hotel in Kuala Lumpur on Tuesday.

Najib also announced a new investment institution called Equity Nasional Bhd (Ekuinas), a private equity fund with an initial capital of RM500mil that would be subsequently enlarged to a RM10bil fund.

It would focus on investments in sectors with high growth potential in line with the new economic model.

Najib also said that the ownership in the wholesale segment of the fund management industry would be fully liberalised to allow 100% ownership for qualified and leading fund management companies to establish operations in Malaysia.

He said that for the retail segment, foreign shareholding limits on unit trust management companies would be raised to 70% from its current level of 49%.

These measures would to further strengthen Malaysia’s position in the fund management and unit trust management of the capital market value chain and allow fund managers an additional option to establish their own operation in the region, he said.

C Guevara