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Amongst the strategic initiatives recommended in the 2002 Budget include:
- relaxing the conditions for restructuring distressed public listed companies
- allowing quality investment properties with stable income to be injected into distressed companies
- relaxing the requirement for share buy back.
- giving an extension up to December 2002 for listed companies with unsatisfactory financial position to comply with the Listing Requirements.
- giving an extension of up to December 2002 for listed companies to comply with the minimum issued and paid-up capital requirements of RM60 million and RM40 million for Main Board and Second Board companies respectively.
KLSE Executive Chairman Dato' Mohd Azlan Hashim said the relaxation of the conditions for restructuring provides greater impetus for affected listed companies to restructure.
"Mindful of the impact of present economic conditions on the capital market and securities industry, these series of relaxation enhances the sources and means for affected public listed companies to regularise their position. In fact, the relaxation would encourage greater restructuring efforts by affected public listed companies," he said.
On relaxing the requirement for share buy back, this recommendation would facilitate the implementation of share buy back. To date, only 118 companies out of a total of 808 listed companies, have sought shareholders approval for share buy back.
On the period allowed for listed companies with unsatisfactory financial condition to comply with the Listing Requirements, the budget speech outlined that all affected listed issuers will be given an extension of time until 31 December 2002 to regularise their financial position.
In this regard, Practice Note 4/2001 which took effect from the 15 February 2001 was issued to ensure that affected listed issuers regularise their financial condition expeditiously within the time frames prescribed. The objective of the practice note is to accelerate the pace of restructuring for affected listed issuers.
Mohd Azlan said it has been observed that the objective of the practice note in accelerating the pace of restructuring has been met.
"This is evident by the majority of affected public listed companies which have made the Requisite Announcements of their plan to regularise their financial condition," he said.Commenting further on the budget recommendation, Mohd Azlan said it is clear that the budget is taking cognisance of the fact that with the impact of recent events affected public listed companies may need more time to restructure.
"Thus, the budget recommendation for an extension of time for affected listed issuers to comply with the Listing Requirements is reflective of its practical approach. KLSE fully supports this practical approach to facilitate the efforts to restructure. However, it has to be emphasised that affected listed issues should nevertheless actively and expeditiously take steps to regularize their financial condition," he said.
Mohd Azlan said not only affected listed issuers but all listed companies should take the valuable opportunity provided by the recommendations in the budget to achieve full compliance with the Listing Requirements.
"KLSE will continue to welcome and encourage more Malaysian companies to seek a listing on the exchange to provide investors with a wide range of investments to select from. However, once listed, these companies should continue to maintain the appropriate standards to make our market more attractive for local and foreign investors to participate in," he said.
As part of the effort to ensure greater stability in the stockmarket as highlighted in the Capital Market Masterplan, it was also announced that the circuit breaker mechanism will be implemented at the stock exchange, in line with the practice in developed markets.
Mohd Azlan said the implementation of the circuit breaker will have a beneficial impact in times of uncertain external influences on the stockmarket.
"The circuit breaker will enhance the tools available to the stock exchange to ensure orderly and fair market, whilst providing the opportunity for greater dissemination of information. This will assist market participants and investors to make informed and well-considered decisions on their investments," he said.
