Malaysia

Posted By Steve On Wednesday, October 28th, 2009 With 0 Comments

Bursa Malaysia Equities

Instruments
Equities: Shares, ordinary shares, preference shares, participating preference shares, cumulative preference shares, redeemable preference shares, convertible preference shares, founders’ shares or management shares, property trust units, transferable subscription rights/warrants.
Debt: Bonds (straight, fixed and non-convertible), promissory notes, Malaysian government securities, debentures, loan stock, subordinated loan notes.
Money Market: Treasury bills, bankers acceptances, negotiable CDs, trade bills, government-issued investment certificates, floating rate negotiable CDs, revolving underwriting facility, notes issuance facility.
Other: Real Estate Investment Trust (REIT) and Exchange Traded Funds (ETF)

Board Lots

Equities: Shares quoted on the Bursa Securities are traded in quantums of 100 units, per board lot.
Odd lots are traded on the "odd lot" board or transacted by private negotiation through a direct business transaction.
Debt: No set board lots, however trades are usually contracted in multiples of MYR 5 million. Debt instruments listed on the Bursa Securities are traded in standard board lots of 100 units each.

Dividend Payment Frequency:
Semi-annual or annual.

Interest Payment Frequency
Quarterly, semi-annual, annual for interest bearing instruments. Under the rules and regulations of the Association of Banks in Malaysia (ABM), the payment of credit interest on idle account balances is prohibited.

Interest Accrual Rate:
Not applicable.

Corporate Actions

Common Events: Rights/bonus issues, conversions, redemptions. Payment is required on due date. Dividend Reinvestment Plans (DRIPs) are not common in Malaysia.
Rights Tradeable: Only for renounceable rights issues for nil paid rights. Trading period restricted to six market days.
New Shares from Exercised Rights: Received within 10 business days from company’s last subscription date.

Foreign Investor Restrictions
Voting rights are generally available to foreign investors who hold shares at least three business days prior to voting or the specific record date set by the issuer, except where it has exceeded the company’s Foreign Ownership Limit.

In general, foreign ownership of Malaysian companies is restricted to 30% as listed in their M & A or governed by Ministry guidelines. There are exceptions where the 30% limit can be exceeded, in particular for companies, which mainly produce goods for export.

Once the limit on foreign-owned shares is reached, the companies concerned can ask for a separate listing of their foreign and local contents. However, this is not mandatory. Note that there is no restriction on foreigners who wish to buy, hold or trade in shares which have reached their foreign holding limit or local shares where such shares are quoted separately. Such shares would be classified as "restricted shares" and the general practice with regard to the treatment on corporate action entitlements is that holders of these ‘restricted’ shares which have exceeded the prescribed foreign ownership limits will not have voting rights, but will rank pari passu with other ordinary shares in all aspects of entitlements declared by the issuer.

Shares Blocked
No. However, shares must be held in the account at least three business days prior to voting day to be eligible or the specific record date set by the issuer.

Meeting Notices/
Agendas

Provided in English. Annual general meetings and extraordinary general meetings are announced two to four weeks in advance.

Meeting Outcome
Usually announced by the company in local newspapers and on the Bursa Malaysia website one to two days after the meeting. The meeting results will only be sent to those shareholders who voted.

Company Reports
On request. All company reports are available on the Bursa Malaysia website.

Power of Attorney:
Not required.

Foreign Ownership
Market Entrance Requirements
No prior regulatory approval is required for entrance into the market. Under Malaysian Exchange Control Laws accounts cannot be opened for Israeli, Serbian or Montenegro nationals.

Investment
Restrictions

Foreign ownership of companies is generally restricted to 30%. There are exceptions whereby the 30% limit can be exceeded, particularly for companies that mainly produce goods for export.

The aggregate foreign ownership limit in Telecommunications companies is 61%. However, a government restriction requires foreign companies to reduce their stake back to 49% after five years.

The foreign shareholding limit for new entries in direct insurers was increased from 30% to 49% with effect from August 24, 2006, to harness the potential for financially strong and internationally known foreign players.

Shareholding in Banking stocks
The prior written approval from the Minister of Finance is required where a person or persons acting in concert with a person, who acquires or disposes of any shares of a licensed institution, equal to 5% or more of the shares of that institution to any single person or persons acting in concert.

Except where the Minister of Finance otherwise approves, no person shall hold more than the following percentages of interest in shares of a licensed institution:

* In the case of an individual, 10%; and
* In the case of a person other than an individual, 20%

As of March 2005, the banking sector has been liberalised to allow foreigners to acquire up to 49% stake in Islamic bank subsidiaries of local banking groups. Commercial banks can now sell up to 49% of their Islamic banking units, subject to the condition that the Islamic bank remains a subsidiary of the commercial banking institutions.

Shareholding of exchange holding company
Under Section 11O of the Security Industry Act 1983, no person or persons acting in concert shall enter into an agreement or arrangement to acquire any voting shares of an exchange holding company where by such agreement or arrangement acquire an aggregate equals to 5% or more of the aggregate of the nominal amount of all the voting shares in the exchange holding company, without first obtaining the prior written approval of the Minister of Finance.

An application for approval shall be made by the person intending to acquire voting shares of 5% or more in an exchange holding company and sent to the Securities Commission, whereupon the Securities Commission shall submit such application, with its recommendation to the Minister of Finance. The MOF may grant his approval subject to such terms and conditions, as he deems fit to impose.

In this context, the exchange holding company referred to is Bursa Malaysia Berhad (ISIN MYL1818OO003).

Once the limit on foreign-owned shares is reached, the companies concerned can ask for a separate listing of their foreign and local contents, although this is not mandatory. Shares that have reached their foreign ownership limits (FOLs) may therefore either be traded singly or separately.

Additionally, foreigners can still continue to buy, hold or trade in shares that have reached their foreign holding limit and which have not been quoted separately, or in shares that are about to reach their limit. However, there could be ramifications on the treatment of corporate action entitlements for such shares.

Under the Securities Industry (Central Depositories) (Foreign Ownership) Regulations 1996, shares held by foreign investors in companies with foreign ownership limitations, and which are not separately quoted, are known as restricted shares. The rights and obligations of these restricted shares may be determined by the issuer or their registrar. General market practice is that holders of these ‘restricted’ shares that have exceeded the prescribed FOLs will not have voting rights, but will rank pari passu with other ordinary shares in all aspects of entitlements declared by the issuer, except the lack of voting rights as mentioned earlier.

The following transactions are subject to approval by the Foreign Investment Committee:

* Single investment in a company of 15% or more
* Aggregate investment of 30% or more
* Any acquisition by foreign interests having a market value in excess of MYR 10 million.

ACCOUNTS MAINTAINED ON BEHALF MALAYSIAN RESIDENTS
The following is a key factor when a foreign agent e.g.Custodian, is acting on behalf of a Malaysian resident. Malaysian residents are allowed to appoint foreign brokers and custodians as their agent. However, the foreign agent is prohibited from retaining funds belonging to a Malaysian resident in the foreign agent’s ringgit account. Any funds belonging to a Malaysian resident must be on a “pass through” basis only.

A Malaysian citizen is classified as a resident if:
i) residing in Malaysia
ii) with a permanent resident (PR) status in another country but is residing in Malaysia
iii) without a permanent resident (PR) status but is working and/or living abroad

A Malaysian citizen with a permanent resident (PR) status in another country and who resides in another country is considered to be a non- resident. For this, the foreign agent is permitted to operate funds of the Malaysian citizen in the same manner as a non-resident i.e. ‘pass through’ of funds is not required.

Repatriation Policy
The local currency (MYR) is freely convertible for non-residents through licensed onshore financial institutions

Same day, next day and spot transactions are allowed for foreign exchange deals for. Forward deals are only allowed based on firm commitments to buy/sell ‘Ringgit Assets’, with exception of:

a) Existing funds in External Account including fixed deposits
b) Negotiable instruments of deposits in ringgit
c) Over-the-counter derivatives or structured products which are tantamount to lending or borrowing of ringgit between residents and non-residents
FX swap contracts are only allowed on new transactions.

The transfer of funds between non-resident cash accounts, called External Accounts (EAs), of different account holders is permitted only for the purchase or sale of MYR assets. The client’s confirmation or evidence of movement of MYR assets is required before the transfer is permitted.

Securities Lending

Bursa Malaysia Berhad (Bursa) has announced the re-introduction of Regulated Short Selling (RSS), and Securities Borrowing and Lending (SBL). Both RSS and SBL transactions can be conducted from January 3, 2007.

RSS is defined as the selling of stocks which the person does not presently own but for which such person has made arrangements to borrow. Any individual can engage in RSS. The settlement of the short sales will be with the borrowed stocks. The borrowing must be made within the approved SBL framework established by Bursa.

Under the SBL framework, the securities clearing house, Bursa Clearing will act as a Central Lending Agency (CLA). As the CLA, Bursa Clearing will borrow from lenders and onward lend to borrowers. Any person who has the requisite number of stocks may lend stocks to the CLA. On the other hand, only approved local stockbrokers may borrow stocks from the CLA. Any other investors who wish to borrow stocks must go through the approved local stockbrokers.

The SBL will be introduced in stages. In the subsequent stages, Bursa will enhance the SBL framework further for all participants. This may include securities borrowing and lending on an over-the-counter basis (OTC) in which the terms of borrowing and lending are negotiated between the parties.

Taxation

Dividend Tax Rate
Corporate taxes are 27%. This amount is deducted at source and is not reclaimable by foreign investors. Certain payments may be exempted from corporate tax, primarily for industries where the government is encouraging development and growth.

Interest Tax Rate
With the announcement of tax exemptions in January 2005 practically all fixed income instruments are now free of withholding tax, with the exception of convertible loan stocks held by individuals and corporates.

Withholding tax on income earned from Real Estate Investment Trusts (REITs)
With effect from January 1, 2007, income from REITs will be subject to WHT based on the following rates:

Investor Type and Withholding Tax (WHT)
Foreign institutional investors* 20%
Non-resident corporate 27%
All other investors other than Malaysian resident companies ** 15%

*Under the Malaysian tax legislation, ”Institutional Investor” is defined as a pension fund, collective investment scheme or such other persons approved by the Minister.

** “All Other Investors” include resident individuals, non-resident individuals and resident institutional investors. For local resident companies, they are not subject to any deduction of WHT but will be taxed based on corporate tax rate upon filing their annual tax return.

Capital Gains Tax Rate: None

Tax Treaties

Albania Iran Poland
Argentina Ireland Romania
Australia Italy Russia
Austria Japan Saudi Arabia
Bangladesh Jordan Seychelles
Bahrain Korea, Republic Singapore
Belgium Kyrgyz Republic Sri Lanka
Canada Lebanon Sudan
Chile Luxembourg Sweden
China Malta Switzerland
Croatia Mauritius Taiwan
Czech Republic Mongolia Thailand
Denmark Morocco Turkey
Egypt Myanmar United Arab Emirates
Fiji Namibia United Kingdom
Finland Netherlands United States of America
France New Zealand Uzbekistan
Germany Norway Vietnam
Hungary Pakistan Zimbabwe
India Papua New Guinea
Indonesia Philippines

Stamp Duty
All instruments relating to the issue of, offer for subscription or purchase of, or invitation to subscribe or purchase debentures, approved by the Securities Commission under Section 32 of the Securities Commission Act 1993, and the transfer of such debentures, are exempted from stamp duty. However, this exemption does not apply to contract notes issued in relation to the sale or purchase of debentures listed on Bursa Malaysia. In this respect, stamp duty charges will be MYR 1 for every MYR 1,000 or fractional part of the value of securities to a maximum of MYR 200, and is payable by both buyers and sellers.

For a rights issue, MYR 10 for any Rights Subscription Form or Rights Renunciation Form for nil paid rights.

Other Taxes:
None

Kuala Lumpur Composite Index (KLCI) 27, April 2007

Base year 1977
Calculation mode Weighted by market capitalisation
Index Current aggregate Market Capitalisation x 100
Base Aggregate Market Capitalisation
NO STOCK CODE SHORT NAME COMPANY NAME
1 6599 AEON AEON CO. (M) BHD
2 5185 AFFIN AFFIN HOLDINGS BHD
3 5099 AIRASIA AIRASIA BHD
4 1015 AMMB AMMB HOLDINGS BHD
5 5076 ASTRO ASTRO ALL ASIA NETWORKS PLC
6 1473 BRDB BANDAR RAYA DEVELOPMENTS BHD
7 1562 BJTOTO BERJAYA SPORTS TOTO BHD
8 5032 BIPORT BINTULU PORT HOLDINGS BHD
9 4162 BAT BRITISH AMERICAN TOBACCO (M) BHD
10 1023 COMMERZ BUMIPUTRA-COMMERCE HOLDINGS BHD
11 1818 BURSA BURSA MALAYSIA BHD
12 2836 CARLSBG CARLSBERG BREWERY MALAYSIA BHD
13 2844 CIMA CEMENT INDUSTRIES OF MALAYSIA BHD
14 2879 CCM CHEMICAL COMPANY OF MALAYSIA BHD
15 7277 DIALOG DIALOG GROUP BHD
16 6947 DIGI DIGI.COM BHD
17 1619 DRBHCOM DRB-HICOM BHD
18 3468 E&OPROP E&O PROPERTY DEVELOPMENT BHD
19 5398 GAMUDA GAMUDA BHD
20 3182 GENTING GENTING BHD
21 7022 GTRONIC GLOBETRONICS TECHNOLOGY BHD
22 1953 GHOPE GOLDEN HOPE PLANTATIONS BHD
23 3255 GUINESS GUINNESS ANCHOR BHD
24 1503 GUOCO GUOCOLAND (MALAYSIA) BHD
25 3034 HAPSENG HAP SENG CONSOLIDATED BHD
26 5819 HLBANK HONG LEONG BANK BHD
27 1597 IGB IGB CORPORATION BHD
28 3336 IJM IJM CORPORATION BHD
29 1961 IOICORP IOI CORPORATION BHD
30 1627 I&P ISLAND & PENINSULAR BHD
31 3492 KFC KFC HOLDINGS (M) BHD
32 5089 KLCCP KLCC PROPERTY HOLDINGS BHD
33 7164 KNM KNM GROUP BHD
34 2445 KLK KUALA LUMPUR KEPONG BHD
35 2003 KULIM KULIM (M) BHD
36 3131 GUTHRIE KUMPULAN GUTHRIE BHD
37 5097 KURASIA KURNIA ASIA BHD
38 3794 LMCEMNT LAFARGE MALAYAN CEMENT BHD
39 6645 LITRAK LINGKARAN TRANS KOTA HOLDINGS BHD
40 2011 LINGUI LINGUI DEVELOPMENT BHD
41 2887 LIONDIV LION DIVERSIFIED HOLDINGS BHD
42 4235 LIONIND LION INDUSTRIES CORPORATION BHD
43 1198 MAA MAA HOLDINGS BHD
44 3735 MAGNUM MAGNUM CORPORATION BHD
45 2496 MALAKOF MALAKOFF BHD
46 1155 MAYBANK MALAYAN BANKING BHD
47 5014 AIRPORT MALAYSIA AIRPORT HOLDINGS BHD
48 3786 MAS MALAYSIAN AIRLINE SYSTEM BHD
49 5077 MAYBULK MALAYSIAN BULK CARRIERS BHD
50 5525 MIDF MALAYSIAN INDUSTRIAL DEV. FINANCE BHD
51 3832 MOX MALAYSIAN OXYGEN BHD
52 3867 MPI MALAYSIAN PACIFIC INDUSTRIES BHD
53 2488 MPLANT MALAYSIAN PLANTATIONS BHD
54 1651 MRCB MALAYSIAN RESOURCES CORPORATION BHD
55 5051 MAXIS MAXIS COMMUNICATIONS BHD
56 5983 MBMR MBM RESOURCES BHD
57 4502 MEDIA MEDIA PRIMA BHD
58 3816 MISC MISC BHD
59 8893 MKLAND MK LAND HOLDINGS BHD
60 2194 MMCCORP MMC CORPORATION BHD
61 3905 MULPHA MULPHA INTERNATIONAL BHD
62 3999 NSTP NEW STRAITS TIMES PRESS (M) BHD, THE
63 4006 ORIENT ORIENTAL HOLDINGS BHD
64 5053 OSK OSK HOLDINGS BHD
65 6866 BERNAS PADIBERAS NASIONAL BHD
66 7108 PETRA PETRA PERDANA BHD
67 5681 PETDAG PETRONAS DAGANGAN BHD
68 6033 PETGAS PETRONAS GAS BHD
69 5052 PLUS PLUS EXPRESSWAYS BHD
70 4634 POSHLDG POS MALAYSIA & SERVICES HOLDINGS BHD
71 4065 PPB PPB GROUP BHD
72 5304 PROTON PROTON HOLDINGS BHD
73 1295 PBBANK PUBLIC BANK BHD
74 6807 PUNCAK PUNCAK NIAGA HOLDINGS BHD
75 1066 RHBCAP RHB CAPITAL BHD
76 2356 SARAWAK SARAWAK ENTERPRISE CORPORATION BHD
77 7158 SCOMI SCOMI GROUP BHD
78 1783 SPB SELANGOR PROPERTIES BHD
79 5517 SHANG SHANGRI-LA HOTELS (M) BHD
80 4324 SHELL SHELL REFINING CO (F.O.M.) BHD
81 4197 SIME SIME DARBY BHD
82 8664 SPSETIA SP SETIA BHD
83 6084 STAR STAR PUBLICATIONS (M) BHD
84 6165 SUNRISE SUNRISE BHD
85 5012 TAANN TA ANN HOLDINGS BHD
86 4898 TA TA ENTERPRISE BHD
87 4405 TCHONG TAN CHONG MOTOR HOLDINGS BHD
88 2267 TANJONG TANJONG PUBLIC LIMITED COMPANY
89 4863 TM TELEKOM MALAYSIA BHD
90 5347 TENAGA TENAGA NASIONAL BHD
91 5103 TITAN TITAN CHEMICALS CORP. BHD
92 7113 TOPGLOV TOP GLOVE CORPORATION BHD
93 7000 TRANMIL TRANSMILE GROUP BHD
94 7100 UCHITEC UCHI TECHNOLOGIES BHD
95 1775 UEMWRLD UEM WORLD BHD
96 4588 UMW UMW HOLDINGS BHD
97 5005 UNISEM UNISEM (M) BHD
98 5142 WASEONG WAH SEONG CORPORATION BHD
99 4243 WTK WTK HOLDINGS BHD
100 4677 YTL YTL CORPORATION BHD

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