PM urges EPF, other GLCs to step up involvement in smaller companies

by JF Fri 14 Jun 2013, 11:01

KUALA LUMPUR: The [url=http://archives.thestar.com.my/search/?q=Employees Provident Fund (EPF)]Employees Provident Fund (EPF)[/url] and other Government-linked investment companies should step up their involvement particularly in high quality mid-cap stocks, said [url=http://archives.thestar.com.my/search/?q=Datuk Seri Najib Tun Razak]Datuk Seri Najib Tun Razak[/url].
The Prime Minister said the fund management industry, including public sector funds, should set specific objectives to increase the velocity of trades in the shares of such companies.
“It is time for government-linked investment companies, especially the EPF, to step up and play a more prominent role, increasing market vibrancy particularly in good quality mid-cap stocks.
“Their participation would provide another avenue for companies to access primary and secondary funding to bring their businesses to the next stage of development,” Najib said in his keynote address at the 2013 Invest Malaysia conference.
Najib said the fund management industry was a major mobiliser of capital, with Malaysia's collective savings pool currently in excess of RM1 trillion.
Smaller companies, however, found access to financing a challenge, with the top 10% of firms in the Malaysian equity market capturing an average of 82% of the capital raised over the last five years.
Najib said efforts to make the capital market more inclusive were underway to ensure better access by start-ups, aspiring entrepreneurs and small to medium-sized companies.
So far, they include the introduction of alternative financing structures such as business trusts as well as the upcoming “myULM”, an online platform for unlisted securities and alternative investment products that will be rolled out next year.
On the country's investment outlook, the Prime Minister said there were indications that interest in Malaysia would be sustained, with foreign participation in Bursa Malaysia topping US$1bil (RM3.14bil) for the first time this year.
In addition, companies listed on the FTSE Bursa Malaysia KLCI Index now generate 45% of their revenue from overseas.