"As part of the industry strengthening process, there has been encouragement and support for the development of universal brokers – bigger, financially stronger, more professional stockbroking companies.
"The various efforts to consolidate stockbroking companies, merge exchanges and streamline clearing houses are all part of strengthening and improving the securities industry.
"With these initiatives in place, the Malaysian securities industry can eventually look forward to an environment that enables investors to contact a single dealer or universal broker; who will be able to trade a range of cash and derivatives, equity and non-equity products, via a consolidated exchange structure, which in turn would be cleared and settled through an amalgamated clearing house," Mohd Azlan said.
On universal brokers, Mohd Azlan said the effort by stockbroking companies to merge is to seek opportunities and find synergies as part of a strategic group to manage the challenges of the marketplace.
He also said KLSE will continue to seek and identify ways to ensure greater efficiency in the process of monitoring and supervising stockbroking companies. Mohd Azlan cited the example of the electronic transmission of operations, financial and compliance reports from stockbroking companies to the Exchange since June 2000.
Commenting on KLSE’s enforcement action on public listed companies, Mohd Azlan said there continued to be vigilant monitoring and supervision of the conduct of public listed companies, with strict and objective enforcement action taken for breaches of the Listing Requirements.
A total of 124 enforcement actions comprising reprimands and fines were taken on public listed companies from July 1999 to June 2000. Of 233 total investigation cases – 35 brought forward from financial year 1999 and 198 initiated during financial year 2000 –127 cases were completed as at 30 June 2000.
On on-line quarterly reporting of financial results by public listed companies, the compliance rate for submissions remained high at 99% as at 30 June 2000.
Mohd Azlan said, since its introduction, quarterly reporting has received positive reactions from market participants. "Quarterly reporting heralds a new era of disclosure, transparency and accountability for the market. Investor confidence is enhanced with full, accurate and timely dissemination of financial information to the market – a significant achievement as the market moves towards the disclosure based regulation," he said.
Earlier in his statement, Mohd Azlan said the main effort by KLSE for the year was for investors – to encourage investors to seek information and find out more about their investments.
"If investors have forgotten how and where to find information, KLSE has reminded them through events, programmes, training and seminars. If investors had difficulty to seek and find information – KLSE has provided the resources and facilities, electronically at www.klse.com.my, and physically through the network of Balai Maklumat BSKL, to promote informed investing," he said.
Mohd Azlan noted that it is against the backdrop of enhancing efforts towards informed investing that the market came to a full cycle during the financial period ended 30 June 2000. The KLSE Composite Index (KLSE CI) closed at 833.37 points, 22.27 points or 2.75% higher than the close of 811.10 for the previous financial period ended 30 June 1999.
With stronger economic fundamentals, the KLSE CI reached a 31 month high of 1,013.27 points on 18 February 2000. Average daily volume in February 2000 reached 1.04 billion units valued at RM3.27 billion compared to 183 million units valued at RM472 million in September 1999.
Total market capitalisation as at 30 June 2000 increased by 7.52% to RM572 billion from RM532 billion the previous year. Total volume increased to 106 billion units as at 30 June 2000 compared to 72 billion units the previous year. Total transacted value increased to RM305 billion from RM136 billion a year ago.
For the financial year ended 30 June 2000, 28 companies were listed compared to 17 in the previous financial period - bringing the total number of companies listed on the Kuala Lumpur Stock Exchange to 773 companies. Of the 28 new companies, 13 were listed on the Main Board and 15 were listed on the Second Board.
As testimony to the continued capital generating capability of the KLSE, funds raised from public issues, rights issues, special issues and private placements amounted to RM8.15 billion whilst funds raised from debt securities and derivatives totalled RM1.16 billion and RM16.6 million respectively.
In reviewing these developments, Mohd Azlan said investors were not only spoilt for choice in contemplating investment in the local stockmarket, investors were also spoilt for means of obtaining information to invest.
"Thus, the answer to the question of whether there are interesting investments at the KLSE is this: it is not that there are uninteresting or interesting investments at the KLSE – there are only uninterested or interested investors," he said in his statement.
