Will things ever change?A fair trading market is one where investors, be they retail or institutional, have equal access to all the relevant information that they are entitled to know. This information will have a bearing on their decision whether to invest in a stock or to exit.
That’s what transparency and corporate governance is all about and that’s why new corporate developments in all listed companies must be disclosed to Bursa Malaysia as quickly as possible.
Yet, for almost as long as the Invest Malaysia conference has been held, access to information has been selective. And for almost all the four years of Invest Malaysia, we have highlighted that this unequal access to information is not fair to all investors.But some things just don’t change for the better. At this year’s Invest Malaysia 2009, corporate presentations were again held behind doors closed to the media.
With the exception of CIMB, the other briefings given by corporations such as Genting, Malayan Banking, Sime Darby and IOI Corp, to name a few, were open only to a select group of investors by virtue of the fact that they were attendees of the conference and differentiated from the media by a different coloured tag.
We are not saying that Invest Malaysia should allow every one, even if they are not participants, to sit in on the presentations. What we are saying is that the sessions should not be closed to the media because of its role as a conduit of information to the public.
What company officials tell fund managers during these briefings must surely be public information. And if it is public information, there is no reason why the media is barred from these sessions.
In an era where transparency and full disclosure of all material information have become all-important, it is hoped that the tags of all delegates at the next Invest Malaysia 2010, both for the media and fund managers, will be in one colour so that they will have equal access to all sessions.
Auction government landIn order to sustain or increase revenue, the government has said it plans to “monetise” government assets through selling or developing government-owned prime land.
This is a logical move to create an extra revenue source for the government. However, it will only be good if the government auctions the land for sale in an open tender, rather than through direct negotiation.
It is only through an open tender that the government will get the best price for its properties. This is also to ensure that such transactions are carried out in an open and transparent manner.
Selling government land and other assets through closed-door negotiations, as infrastructure concessions have often been granted in the country, would only open an avenue for potential abuse, inefficiency and misallocation of resources, drawing endless criticism from the public.
It is ironic that even in China, which is ruled by a centralised communist government, land is auctioned off by the government via open tender rather than through “direct negotiations”.
The Chinese government has long learnt about land auctions from the former British colonial government in Hongkong. Just last week, a prime land parcel along Beijing’s Guangqu Road was auctioned off for more than RMB4 billion (RM2.06 billion), after fierce bidding among major developers from the mainland and Hongkong.
According to China Daily, the price of RMB4 billion for the Guangqu Road plot has set a record for land in Beijing. News of the bid had even triggered a mini-rally among property stocks in China.
Back home, it is crucial for our government to start inculcating a culture for “open tenders”, particularly when it comes to selling government land.
As evident in the Guangqu Road case, it sends a strong signal that property developers remain bullish about Beijing’s property market, indicating that the results from an open tender could be far greater than the value of the transaction itself.
Wake up to liberalisationPAS president Datuk Seri Abdul Hadi Awang’s objection to the economic liberalisation measures announced by the Prime Minister are indeed revealing about his ignorance of economic issues facing the country.
Hadi had protested last week against the lifting of the 30% bumiputera equity ruling for initial public offerings and the removal of the Foreign Investments Committee’s guidelines on equity acquisitions, mergers and takeovers on the grounds that the Malays are not yet competitive enough economically.
It is clear from’s Hadi’s statement that the leader of the Islamic party is playing to the Malay-Muslim gallery despite the crying need for the Malaysian business climate to be revitalised to make it a competitive destination for investment capital.
The need for Malaysia to move beyond the inefficiencies of its affirmative action policy towards a more targeted distribution of economic opportunities for disadvantaged groups has been articulated so explicitly that Hadi’s complaint comes across as unproductive noise. Hadi must wake up to the fact that the protectionist mindset that the previous policy had engendered has held back the country’s economic progress.
Furthermore, Hadi’s complaint raises some concern about the kind of thinking that is likely to come from him and his party in the context of the country’s economic modernisation. Are we likely to hear more of the same from Hadi as the country grapples with the challenges of a fully liberalised global economic regime coming our way?
If Hadi is serious about a bigger role for his party in the nation’s life, he must put himself through a major re-engineering exercise in order to engage with an economic development model that can withstand the scrutiny of the international community.Talk of championing communal interests can resonate in the isolated countryside, but is decidedly out of place at the crossroads of the international marketplace.
This article appeared in Corporate page of The Edge Malaysia, Issue 762, July 6-July 12, 2009