Cross listing of Malaysian Corporations in foreign stock exchanges
CROSS LISTING OF MALAYSIAN CORPORATIONS IN FOREIGN STOCK EXCHANGES
by Dr. Chen Man Hin
Perlis Palm Oil Berhad, a subsidiary of Perlis Plantation Berhad is in the process of being merged with Wilmar Corporation a Singapore listed corporation. The move seems to have created anxiety in the business community.
There are fears that a large corporation being absorbed by a foreign company may bode ill for the country as capital is being taken out, and is of bad omen.
Concern has also been expressed that corporate mogul, Tan Sri Robert Kuok is pulling his business conglomerate out of Malaysia. This may mean the beginning of an exodus of capital from the country. There is no basis for such speculation.
The fact is that cross listing of corporations is a common international practice adopted by world class companies, which for strategic reasons often choose to list their companies in the stock exchanges of different countries.
Examples are Hong Kong Shanghai Bank which is listed in Hong Kong, London and New York. So also with China Life a giant insurer in China, is listed on Hong Kong, New York and Shanghai, also Infosys a well known Indian IT corporation is listed both in India and New York.
An outstanding example is Robert Kuok, an international mogul, he has corporations listed in all major stock exchanges of Asia.
Wilmar Corporation of Singapore is part of Robert Kuok’s stable and it plans to be a world player in the production and marketing of biodiesel. It is logical for it to take over Palm Oil Berhad as it is a major producer of palm oil.
Large corporations usually go global, and list their companies in the most active stock exchanges like London, New York, Shanghai, Hong Kong and Singapore, because of the high valuation which these exchanges give to their shares and the advantage of raising new capital for expansion.
It is time for Malaysian corporations to move out from their shell and list theri companies in foreign exchanges and see their market valuations soar sky high. This will benefit the corporations, the shareholders as well as their home country
Bursa Saham should participate in the game of cross listing of local and foreign corporations. They need to liberalise their policies and regulations to attract foreign companies to list on the Malaysian exchange. Not to do so would mean that Bursa Saham would remain as an isolated stagnant backwater and lose out to stock exchanges which are on the international circuit.
April 4th, 2007 at 13: 21.26
But to cross list, your fundamentals must be strong and accounts not dodgy…something virtually impossible to ascertain in Malaysia with its vagaries of unnecessary racial equity ownership and GLCs with questionable share values….market rules are simple..the fittest survive and Malaysian companies always fail this fitness test…which is why jaguh kampong is the policy in place at the moment. The loss and abscence of talented human capital will ensure that our share values will continue to diminish. You can cross list….but it would be more pragmatic to just sell out at a fire sale price…
April 4th, 2007 at 16: 48.01
To avoid giving 30 % race quota, some may have chosen to list their off shore operations elsewhere: e.g. Starcruise ltd., parkson HK etc.
April 5th, 2007 at 14: 15.00
Cross-listing is also spreading the eggs in many baskets.
Robert Kuok is an expert in his game. SO would other experts gradually move in those directions.
IOI, for instance, has investments in biodiesel ventures in Europe.
There will be more and more as Malaysians see the need to spread their risks in the wake of a senseless regime under BN and AAB.
April 5th, 2007 at 21: 04.05
Bursa Saham will remain forecer an isolated stagnant backwater and had already lost out to stock exchanges in the region, not to compared it to other parts of the world.
Look at others Bourses in the region, they have overtaken Bursa. Socialist Vietnam is overtaking bursa soon when the policy makers from the ruling coalition still think of self serving agenda.