KL sets rules for listing new projects

KL sets rules for listing new projects

KUALA LUMPUR (AFP): Malaysia's Securities Commission said Saturday only firms developing major projects in the country could be listed on the local bourse without a track record, as the government announced moves to liberalize the capital market.

Deputy Prime Minister Anwar Ibrahim said Thursday that companies managing huge infrastructure works in Malaysia would be allowed to float their shares on the Kuala Lumpur Stock Exchange (KLSE) as long as their cash flow was strong.

But Securities Commission chairman Munir Majid said Saturday that the companies must be able to prove that their earnings could give a suitable rate of return to shareholders.

"High standards of due diligence would be imposed on the company, its management, the advisers and experts, whose representation would be relied upon in the assessment of the project," Munir said in a statement.

One of the biggest infrastructure projects in Malaysia currently is the development of the nine-billion-ringgit (US$3.6- billion) Kuala Lumpur International Airport.

Others include the central redesigning of the Malaysian capital under a five-billion-ringgit project dubbed the Kuala Lumpur City Center and a 1.1-billion-ringgit city rail system called the Light Rapid Transit.

None of the projects is listed under its respective entity, although shares of some Malaysian companies engaged in them are traded on the KLSE.

Munir said the Securities Commission had drafted a new set of guidelines for listing firms undertaking major projects in Malaysia, but did not give details.

"Since the projects would not have the earnings track record, the SC would be concerned about (their) future cashflows and risks," Munir said.