In response to recent media articles which makes reference to ‘poor' quality of foreign listings on Bursa Malaysia, the Exchange reiterates that the listing framework requires advisers to undertake rigorous due diligence exercises including corporate governance assessments. The Exchange's primary aim is to maintain investor confidence and sustainable investor interest in order to uphold the quality of the capital market. Hence, investor protection remains the top driving factor that promotes a high level of corporate governance standard among public listed companies in Malaysia.
Principal advisers who submit an initial public offering listing application on behalf of a company are tasked to ensure that thorough assessment is done which focuses primarily on the issuer's compliance with the requirements, its suitability for listing and corporate governance record particularly of the promoters of the company. When in doubt, advisers are encouraged to consult with the Securities Commission and/or the Exchange prior to submitting a listing application.
The regulators nonetheless, emphasise on full disclosure as it is paramount to ensure that investors have access to the relevant information of the companies in order for them to make informed investment decisions.
To ensure that an appropriate oversight structure is in place for a dynamic capital market, the Exchange constantly reviews and enhances its monitoring, surveillance and supervisory role and would not hesitate to take enforcement actions for breaches of its rules. As part of the pre-emptive measures, Bursa Malaysia monitors and engages with listed issuers, directors and auditors in line with the corporate surveillance and engagement framework. This includes performing trend analysis, identification of red flags, compliance review of corporate governance disclosures in the listed issuers' annual reports and on-site examination on selected issuers.
The Exchange also constantly engages with investment banks and/or intermediaries to educate and provide clarity on our listing and regulatory framework.
Perception that the foreign companies listed on Bursa Malaysia were unable to get listed elsewhere is inaccurate. In a downturn situation, the resilience of our market and fair market valuations have been key factors that attracted these Chinese companies to choose Malaysia as their capital raising platform. The Government's pro-business stance, its enhanced ties and cordial relationship with China has also helped to provide confidence to these Chinese companies and profile Malaysian capital market in the international stage.
Chief Executive Officer, Dato' Yusli Mohamed Yusoff said, "In our pursuit to make Malaysia attractive as an international listing and investment destination for local and international investors, we emphasise greatly on our key strength of providing high standards of investor protection as it underpins the quality and strength of a market. Hence, it is unfortunate that there has been a fair amount of stereotyping of Chinese companies as lacking quality based on the perception of what happened in other parts of the region."
He pointed out that, "as with all investments, there will be risks involved and investors need to be aware of this, as well as monitor their investments. Investors should play their part by actively studying and researching companies' fundamentals before investing."
The Exchange also encourages existing and potential listed companies to initiate and execute active investor relations engagement. In this respect, the Exchange has established Malaysian Investor Relations Association (MIRA) to assist and foster communication between listed companies and the investment community. Issuers from foreign jurisdictions will have to intensify and conduct regular engagements with the investment community in order to enable them to get a better understanding of the company.