Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : BUKIT DAMANSARA, KUALA LUMPUR
Tarikh/Date : 14/08/87
Tajuk/Title : PERASMIAN PEJABAT BURSA SAHAM KUALA
LUMPUR (BSKL)
Yang Berhormat Menteri Kewangan,
Encik Daim Zainuddin;
Dif-Dif Kehormat;
Tuan-tuan dan Puan-puan sekalian.
Hari ini ialah hari yang bersejarah bagi Bursa Saham
Kuala Lumpur kerana ia telah melangkah setapak lagi ke arah
kemajuan dengan pelancaran perkhidmatan MASA (real time
price information system) dan perasmian pejabat baru.
Dengan adanya ruang yang lebih luas ini saya berharap Bursa
Saham Kuala Lumpur akan dapat menampung perubahan-perubahan
yang diperlukan untuk melengkapkan dirinya supaya dapat
memberi perkhidmatan yang lebih efisien dan profesional.
Ladies and Gentlemen,
2. We are fortunate today that as we open this new office,
there is clear evidence that the economy is improving.
Commodity prices
have reached better levels, the Balance of Payments position
is brighter and our external reserves are comfortable. All
these favourable economic factors are making the stock
market quite bullish. With the banks now flushed with funds
and the lending rate being progressively reduced, I am sure
this will generate more opportunities for growth of the
stock market.
3. This change of fortune has not been entirely
fortuitous. It is due to the long and patient steps the
Government have taken to diversify the economy, to
strengthen the nation's finances and to improve the
incentives for the private sector. We will continue with the
efforts to stimulate economic growth, promote private
investment and increase our competitive position so that the
structural foundations of our economy will be further
strengthened.
4. The stock exchange too as one of the institutions that
is vital to a modern economy, should strive to make
improvements that will enhance its contribution to national
development.
Ladies and Gentlemen,
5. The significance of the stock market as a vital
component of the Malaysian capital market cannot be
over-emphasised. The securities market has been carefully
developed over the years to ensure that it fulfills its
primary role as a channel for the mobilisation of funds and
a market for the investing public. Given this role, the
Kuala Lumpur Stock Exchange or the KLSE, which is the nerve
centre of the stock market, has the responsibility of
upholding its image as a fair and clean trading place, which
should not have any tinge of suspicion and be able to
conductits affairs with a high degree of professionalism.
6. The shock of the Pan-Electric affair and its effect of
eroding investors' confidence in the stock market have made
us more aware of the weaknesses in the trading system and
the fragile nature of the local market. I am glad to see
that the KLSE and relevant Government authorities have
responded by introducing measures that will help to
strengthen the stockbroking industry and to protect the
interests of the investing public. Thus, I welcome, for
instance the stand-by credit facility which has been
established to provide funding for the stockbroking
companies should the need arise. The Government on its part
has amended the Securities Industry Act of 1983 to
prohibit the use of manipulative and deceptive devices in
dealing in securities and to define more clearly the
inspectorate powers of the Registrar of Companies.
7. The KLSE, itself undertook a number of measures which
included a thorough revamp of its Listing Manual. The
objective of the much more stringent requirements set out in
the revised Manual is to instill greater responsibility and
accountability among promoters, directors and corporate
managers of companies listed on the Exchange. These measures
are welcome and I urge the KLSE to continue with such
efforts and indeed increase their vigilance to improve the
integrity of the market.
8. The Capital Issues Committee which is the regulatory
authority of the securities industry, has also published its
Guidelines to enable corporate planners as well as the
investing public to have a better appreciation of its
policies.
9. All these measures which have been taken to clarify and
tighten the rules and regulations are no doubt important.
In addition, however, there should also be measures aimed at
making the stock market more stable and resilient so that it
will not be so easily influenced by factors which have
little or no relevance to the economic fundamentals. As the
stock market is often taken as a barometer of the state of
the economy, it is highly desirable that the market
performance reflects the real economic situation.
Unfortunately, we usually find that the market is very
vulnerable to irrelevant matters, which often turn out to be
mere speculation or rumours. This is surely an unhealthy
state of affairs for all parties concerned, especially the
in vesting public. I would like to see the relevant
authorities find ways and means to reduce the extreme
fluctuation in our stock market.
10. As you are all aware, the Government is anxious to
improve the structure of the industry both financially and
professionally. To achieve this objective, the Government
is encouraging the corporatisation of the stockbroking
firms. This will increase the expertise and capitalisation
of the stockbroking firms. Such a stronger foundation will
increase their capacity to handle larger volumes of business
and promote the competitiveness of the industry.
11. Through corporatisation, I hope we can also build the
international image of our firms and enable them to increase
their dealings with foreign brokers. Some foreign brokers
tend to bypass our market because they do not know much
about it and about the firms. The local firms must be more
aggressive to project their image abroad so that they can
capture a larger share of the foreign business and earn more
income for the country.
Ladies and Gentlemen,
12. In view of the Government's aspirations to strengthen
the Malaysian stock broking industry, we have now taken a
decision to issue new stockbroking licences to the three
largest local banks. Each of these licences will carry a
seat money of $5 million Ringgit which will be used as
development funds for modernising the KLSE with better
facilities and equipment for the betterment of everybody in
the industry. Of course there will be conditions attached
and these will be spelt out later.
13. I am told that the market is being strengthened by the
inflow of foreign funds into the market. The launching of
the Malaysia Fund recently has given our local market wider
exposure to foreign investors. This is a welcome
development which hopefully will lead to more foreign funds
flowing into the Malaysian stock exchange.
14. We have spared no efforts to restore confidence and to
create a suitable environment for a healthy and orderly
growth of the stock market. It is now up to the brokers and
other intermediaries to maintain this confidence by
injecting the much needed professionalism through innovative
measures and healthy trading practices. Corporate advisers,
funds managers and stockbrokers should be more professional
and are expected at all times to exercise a standard of
behaviour and integrity which should be beyond and above
reproach. The other group of participants who have an even
greater responsibility are the managers and directors of
corporations listed on the Stock Exchange. They have the
very fundamental and crucial responsibility, of being
accountable to their shareholders.
15. The integrity of all individuals is absolutely
essential in order to preserve confidence in the stock
market. In this connection, I would like to touch on the
question of insider trading, which is now a topic of some
concern in the international stock broking community.
Although insider trading is not a major problem in Malaysia,
we must never allow it to happen here. I would like the
Exchange to ensure that everybody connected with the
Exchange exercises a high degree of responsibility, so that
the integrity of the market as a trading place will not be
questioned and open to suspicion or affected by endless
rumours. An effective means of reducing the scope for
insider trading is to ensure that pertinent corporate
decisions such as mergers and takeovers are fully and
speedily disclosed to all concerned. By making such
information quickly available to the investing public,
this will reduce the chances of them being manipulated by
a few individuals who have access to privileged information.
Anybody who is found to be involved in insider trading must
be severely punished.
16. I also wish to emphasise that while rules have been
promulgated to regulate the system for the desired
objective, it is the Government's intention to allow the
KLSE to be self-regulatory as far as possible. However,
while the Government recognises the need to allow the KLSE
to conduct its own affairs and chart its own course of
development, the Government will continue to oversee the
market in the interests of the investing public and would
not hesitate to continue the 'weeding-out process' whenever
it deems it necessary to ensure the integrity of the market
for the protection of the investing public.
Ladies and Gentlemen,
17. Finally, I wish to congratulate the KLSE Committee for
the smooth transfer of the Stock Exchange to this new
office. I am told there are plans to develop further its
facilities for the benefit of the industry and the public.
On the part of the Government, we wish the Committee all
the best in their efforts to modernise the KLSE and enhance
its image among local as well as foreign investors.
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