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Out of a total of 874 companies listed on the KLSE as at 31 March 2003, 855 companies have submitted their results for Financial Year 2002. Of these 855 companies, 780 companies have results for comparable periods for Financial Year 2002 and Financial Year 2001. The 780 companies comprise 522 Main Board companies, 250 Second Board companies and 8 MESDAQ Market companies.
Executive Chairman of KLSE Dato' Mohd Azlan Hashim said whilst KLSE continue to enhance regulations and enforcement in sustaining an environment conducive for greater investor confidence and investment, at the other end of the scale is the performance of companies listed on the exchange.
"In terms of performance, the 780 companies have reported total revenue of RM371.96 billion for Financial Year 2002 - an increase of 4.6% compared to total revenue of RM355.56 billion for Financial Year 2001.
"The net profit of these companies were also significantly higher at RM14.93 billion for Financial Year 2002 - an increase of 49.3% compared to a net profit of RM10.01 billion for Financial Year 2001," he said.
Mohd Azlan said given the fundamental strength of these companies and the prospects for growth in the economy and the capital market, it is expected that more companies listed on KLSE will continue to register healthy earnings in the medium to longer term. He added that external factors contributing to on-going uncertainty may still affect the market.
Mohd Azlan was speaking after KLSE's 26th Annual General Meeting (AGM) which was successfully concluded as follows:
- The minutes of the last AGM, KLSE's 25th AGM held on 10 November 2001 were confirmed.
- The Report of the Committee, the Income and Expenditure Accounts, the Balance Sheet and the Auditors Reports of KLSE for the year ended 31 December 2002 were adopted.
- Ernst and Young has been re-elected as Auditors of KLSE.
- Dato' Mohaiyani Shamsudin has been re-elected as Deputy Chairman of KLSE.
- Encik Yusli Mohamed Yusoff have been re-elected as a Member to the KLSE Committee.
- Consolidating KLSE Group
- Demutualisation of KLSE
- Enhancing Regulations
- Enhancing Market Infrastrucutre
- Expanding Market Promotions
I. Consolidating KLSE Group
Mohd Azlan said to further enhance efficiency and effectiveness of the KLSE Group, efforts to streamline and consolidate corporate and operating structures continued to be implemented with the objective of optimising the utilisation of resources and to further develop synergistic benefits of market institutions in Malaysia.
The various efforts in consolidating the KLSE Group includes: Completion of the KLSE-MESDAQ merger with the establishment of the MESDAQ Market on KLSE in March 2002.
Streamlining of the information technology activities of the KLSE Group with dedicated resources and management team under a profit centre - KLSE Technology Sdn Bhd in May 2002.
Streamlining of clearing, settlement and depository operations under the Clearing, Settlement and Depository Group in October 2002. Facilitating the integration and development of the KLSE Group information services business under KLSE Information Services Sdn Bhd which became a wholly owned subsidiary of KLSE in November 2002.
II. Demutualisation of KLSE
On the demutualisation of KLSE, Mohd Azlan said this will involve the legal conversion of the Exchange from a mutual entity limited by guarantee of stockbroking members into a company with shares and shareholders.
"Demutualisation is also a transformation process towards greater progress for the exchange and the industry. Demutualisation will enable KLSE to effectively broaden its interests and capability - to better represent the needs and requirements of all stakeholders involved in the securities industry and the capital market.
"Demutualisation will enable the KLSE Group to better compete for capital, growth, ideas and innovation," he said.
Mohd Azlan added with approval in principle for demutualisation obtained in late 2002, demutualisation of KLSE is currently targetted for completion by the second half of 2003.
III. Enhancing Regulations
Significant efforts by KLSE in enhancing regulations and effective enforcement to achieve greater investor confidence, corporate governance practices and protection of all shareholders' interests include:-
Amendments to KLSE Listing Requirements relating to Disclosure of Quarterly Financial statements by public listed companies in conjunction with Malaysian Accounting Standard 26 on interim financial reporting in June 2002.
Establishment of the Taskforce on Corporate Disclosure Best Practices to formulate and issue guidance on best practices to assist public listed companies comply with disclosure requirements in line with KLSE Listing Requirements and relevant securities laws in October 2002.
Announcement of de-listing procedures for Specified PN4 Companies to enhance transparency on the process applicable to these companies in November 2002. Prior to making a decision, KLSE will accord due process to affected Specified PN4 Companies. The commencement of de-listing procedures against such companies is necessary in the interest of investor protection and maintenance of market integrity.
Amendments to KLSE Listing Requirements and issuance of Practice Note 13/2002 on Requirements Relating to Directors and Required Signatory to Statutory Declaration Accompanying the Annual Audited Accounts and Practice Note 14/2002 on Requirements on Transactions and Related Party Transactions to take effect in January 2003.
IV. Enhancing Market Infrastructure
With the objective of contributing towards an efficient investing environment, KLSE continued to enhance market infrastructure in meeting investor requirements.
Since April 2003, KLSE has commenced standardising board lot sizes of securities traded on the KLSE at 100 units of securities per lot, from the current multiple board lots 1000, 200 and 100 units.
Trading in standard board lot has been implemented in stages to ensure a smooth and orderly implementation and is targeted for completion by June 2003. To date, board lots of all counters on the Second Board and all counters in the trading services sector of the Main Board have been standardised. The implementation of the standard board lot has been received very positively by all market participants, including investors.Trading in standard board lot has also increased the orders and trades of shares.
V. Expanding Market Promotions
On market promotions, Mohd Azlan said having implemented efforts to enhance the investing environment, KLSE complements these efforts by expanding market promotions.
"This is to ensure accurate and comprehensive communication on the latest developments in the capital market and securities industry in Malaysia," he said.
In expanding market promotions, roadshows were conducted in major international financial centres in the United States, United Kingdom and Asia.
With participation from senior representatives from Bank Negara and Securities Commission, the roadshows were well received and managed to attract over 150 international fund managers and major institutional investors in one to one meetings and roundtable discussions.
The KLSE Group also participated actively in international organisations whilst featuring the Malaysian capital market prominently at the events organised by the World Federation of Exchanges (WFE), East Asian And Oceanian Stock Exchanges Federation (EAOSEF), Asian Securities Analysts Federation (ASAF), Commonwealth Association For Corporate Governance (CACG) and the International Organisation of Securities Commission (IOSCO).
KLSE also brought the international exchange community to Kuala Lumpur when it hosted the EAOSEF working committee meeting in November 2001 and the WFE forum in December 2002.
Mohd Azlan said given the broad range of efforts initiated and implemented by KLSE during the period under review, it is also important to note that the success of these efforts was possible with the continued support of the government, industry, market participants and media organisations.
"Indeed, such teamwork has to continue and further strengthened to ensure that the beneficial objectives of such efforts are fully derived by all parties," he said.
