Association of Islamic Banking Institutions Malaysia

Capital Market Liberalisation Move Timely

Thursday, 02 July 2009

KUALA LUMPUR, June 30 (Bernama) -- The move to liberalise the capital market is timely as it would create a conducive environment for trade and investment, said Deputy Finance Minister, Datuk Wira Chor Chee Heung.

It would create opportunities for foreign companies to take advantage of these newly announced measures especially when the Malaysian economy starts to pick up by the first quarter of 2010, when more investment is expected to come.

Today, Prime Minister Datuk Seri Najib Tun Razak announced several economic liberalisation measures to make Malaysia a more attractive investment destination.

Among them, he announced that the wholesale segment of the fund management industry will be fully liberalised to allow 100 percent ownership for qualified and leading fund management companies to establish operations in Malaysia.

For the retail segment, the foreign shareholding limits for unit trust management companies will be raised to 70 percent from its current level of 49 percent, he said.

Najib also announced a comprehensive deregulation of the investment guidelines administered by the Foreign Investment Committee (FIC).

The scope and functions of the FIC have been substantially rationalised, involving fewer transactions, rules and conditions.

"By 2010, the economy would at least achieve positive growth. For this entire year, according to government studies the economy is forecast to grow at minus four to five percent," Chor said after the launch of the National Association of Malaysian Life Insurance and Financial Advisors (NAMLIFA) Akard logo.

Meanwhile, on the implementation of rebate for general insurance, Chor said, there will be discussions at the Cabinet meetings this week, if there is a need to delay the implementation.

He said Bank Negara has decided to go ahead with the implemenation of general insurance rebate of five to 10 percent by July 1 provided individuals purchase general insurance covers directly from insurance companies.

For motor insurance, individuals will receive a five percent premium rebate in the first year of implementation and 10 percent thereafter

"I strongly believe that even if this ruling is implemented it will not affect much the income of the agents, because general insurance agents perform more than general insurance cover for vehicles. They also perform other services," he said.

-- BERNAMA