~penarik beca

Rakyat Bumiputera kehilangan RM50 bilion saham yang diperuntukkan kepada mereka , dipercayai akibat demonstrasi anti-ISA Sabtu lalu. Amat besar kerugian itu.

Dari RM52 bilion saham yang diperuntukkan kepada para pelabur Bumiputera, hanya RM2 bilion sahaja yang masih ada di tangan mereka.

RM2 bilion saham itu kini berjumlah RM158 bilion (berasaskan market capitalisation Bursa Malaysia yang berjumlah RM814 billion sebelum ditulis rencana The Edge bertajuk "Big Money: What’s RM54b in shares really worth?" - lihat di bawah. Orang kata market capitalisation dikira dengan mendarabkan harga saham dengan jumlah keseluruhan saham. Mana aku tau).

Adalah dipercayai, jika tidak berlaku demonstrasi anti-ISA Sabtu lalu, ia pasti lebih dari RM158 bilion. Bayangkan, dari RM2 bilion boleh beranak hingga RM158 bilion. Kalau RM50 bilion tu tak hilang, aku pun tak tau nak kira berapa banyak saham yang masih ada di tangan Bumiputera.

Trilion-trilion la kot.

Apabila ditanya kepada mereka yang telah menghadiri demonstrasi anti-ISA itu, mereka hanya ternganga kehairanan.

Mereka tak tahu ke mana perginya RM50 bilion itu.

Apabila ditanya pula Bumiputera manakah yang diagih-agihkan saham-saham tersebut dan mereka buat apa terhadap saham-saham itu, mereka yang telah menghadiri demonstrasi anti-ISA itu terus melopong tak tau nak kata apa.

Apabila ditanya "takkan tak tau, hampa tak dapat ka?", mereka dok geleng-geleng kepala pulak.

"Laa.. Takkan hampa tak dapat?!!"

"Sungguh. Tak dapat. Tak percaya pi check. Ada dak nama aku dalam nama-nama yang dapat tu. Aku tak tau bab saham-saham ni. Lawan ISA aku tau la.

"Ca hang pi tanya depa tu. Depa tau la kot," kata salah seorang dari mereka sambil menunjuk ke arah bangunan Umno (Gambar di bawah ihsan Malaysiakini dan berita-berita pula ihsan The Edge).


Berkaitan:
Big Money: What’s RM54b in shares really worth?

The Edge (6/7/09): Nobody can give a figure as to how many shares of listed companies have been distributed to bumiputera individuals and institutions since the inception of the New Economic Policy (NEP) in 1971.

But one thing is clear: some 10 years after the era of “easy money” made from the allocation of shares at discounted prices, there are today thousands of bumiputera millionaires.

Prime Minister Datuk Seri Najib Razak gave an idea of the amount of shares distributed when he opened the Invest Malaysia conference last week and unveiled some groundbreaking measures that effectively overhauled the wealth distribution component of the NEP.

Announcing the lifting of the rule requiring companies to allocate 30% of shares to bumiputera investors, Najib revealed that between 1984 and 2005, a total of RM54 billion worth of shares had been allocated to bumiputera investors. Only some RM2 billion is left in the hands of these investors.

His message to bumiputera investors was that the current mode of distribution of wealth via the allocation of shares was not sustainable. Nobody could find fault with his line of reasoning, except PAS, a member of Pakatan Rakyat.

But the revelation raised some interesting questions: how much of the allocated shares distributed at par value have been translated into actual wealth? How much profit did the recipients make? There probably would have been some who had lost money, but it would have been remote considering how new listings were a craze until 1998.

According to the third Outline Perspective Plan, ownership of bumiputera equity is 19.4%. And the calculation is based on the par value of the shares.

Assuming that the RM2 billion is taken as a major component in the 19.4% bumiputera equity ownership and is calculated as par value, this would translate to some RM158 billion based on the market capitalisation of Bursa Malaysia of RM814 billion last Friday.

If RM2 billion worth of shares in par value translate to RM158 billion in equity value, what would have been the value of the RM52 billion worth of shares that have been disposed of over the years?

If calculated proportionately, without taking into account the time value of money, and if the shares did not lose value over time, the RM52 billion shares sold would amount to a huge sum of money.

But this certainly is not a fair comparison because share prices are volatile, depending on the performance of the economy and the company’s core business.

The market capitalisation in the 1980s and 1990s is nowhere near the levels that we are seeing now. For instance, at end-1997 when Malaysia was entering a phase of economic volatility due to the currency crisis, the market capitalisation of Bursa, then known as KLSE, was RM376 billion.

Then, we did not have 1,000 companies that are listed on Bursa today.

During the crisis, the value of the shares in companies with substantial bumiputera interest declined significantly.

The “can’t fail companies”, such as the Renong Group and Malaysian Airline System Bhd, were nationalised because the main bumiputera shareholders fell under a pile of debts in the aftermath of the 1998 Asian financial crisis.

Malaysia’s corporate history will not forget the likes of Tan Sri Halim Saad and Tan Sri Tajudin Ramli, who were among a coterie of bumiputera individuals handpicked by former finance minister Tun Daim Zainuddin to spearhead the drive for bumiputera equity ownership and participation in the economy.

In hindsight, the bumiputera share ownership would probably have been highest in the mid-1990s after the great bull run of 1993 and the magnificent Second Board run in 1996.

Apart from raking in profits from the sale of shares allocated, the wealth effect created from the many government jobs given to well-connected listed companies that in turn sub-contracted them to bumiputera contractors was huge.

The wealth-distribution scheme collapsed after the 1997/98 financial crisis when new listings no longer became a profitable venture. The reason was that the Securities Commission decided that companies themselves must set their price in the listing of new shares, hence reducing the discount significantly. That was because the higher the IPO price, the more money the company makes from its listing.

That ended the fairytale era of easy money. Eventually, new listings no longer became money-making ventures. That effectively ended the wealth distribution system.

But nobody will know how much those who benefited from the disposal of the RM52 billion shares made. It certainly is much, much more than the amount that has been stated.

This article appeared in Corporate page of The Edge Malaysia, Issue 762, July 6-July 12, 2009

Big Money: Is Ekuinas a better option?

The Edge (6/7/09): As the sun sets on the Foreign Investment Committee (FIC), the 35-year-old panel that approves foreign investments in Malaysia, the government is establishing another institution known as Ekuiti Nasional Bhd or Ekuinas to promote genuine bumiputera participation in commercial activities.

Ekuinas is a private equity fund with an initial capital of RM500 million, funded by the government. In time, the fund size will be enlarged to RM10 billion. The fund will invest in high growth sectors, such as education, tourism and oil and gas.

Going forward, Ekuinas will be driven by two key principles: to be market-friendly and underpinned by commercial sense as opposed to the FIC’s restrictive policies in the past, and to encourage meaningful and sustained bumiputera participation in commercial activities.

Prime Minister Datuk Seri Najib Tun Razak assured that participation of bumiputera through Ekuinas will be based on merit.

“We need a new instrument but the new instrument must be more market-friendly and in the process, we’re embarking on a new philosophy which will help the good and the best bumiputera in business, not just any bumiputera but bumiputera who are willing to help themselves,” added Najib, also the finance minister.

Ekuinas will invest in bumiputera entrepreneurs and unlisted companies while encouraging joint ventures between the bumiputera and non-bumiputera business communities. It will also facilitate mergers and acquisitions involving bumiputera-owned companies and other local and foreign entities with ready customer base.

The rationale behind Ekuinas is that the FIC, set up under the New Economic Policy (NEP), had failed to increase bumiputera equity participation. Also, the government finally recognised that FIC’s archaic rules have no place in today’s intense competition for foreign investments, which would help diversify the Malaysian economy and move it up the value chain.

The government believes this model would work in striking a balance between attracting foreign investors and addressing the need for a more effective instrument for bumiputera participation. The prime minister also maintained that the 30% bumiputera equity shareholding remains a “macro target” and Ekuinas is one of the measures to achieve that target along with other existing institutions, for example, the national unit trust schemes managed by Permodalan Nasional Bhd (PNB).

But is Ekuinas necessarily a better alternative in achieving the objective of fair distribution of wealth, compared to restrictive policies under the NEP? It must not succumb to previous trends of making the rich richer while neglecting those who genuinely need help but lack the connection to the right people.

As Ekuinas operates as a private equity fund funded by the government, how transparent will it be and can taxpayers be certain it will not be subject to abuse? Will its investments be made public? Even though it is a “private” equity fund, it should still be accountable to taxpayers who are effectively investors of the fund. The fact that the fund will invest in private companies may be another cause for concern. As such, generous information should be offered regarding these companies and entrepreneurs.

While it may be impractical to require Ekuinas to make public its every move, there has to be a mechanism in place to ensure minimal abuse of power and maximum transparency.

The concern is valid given the government’s poor record in transparency when it comes to disclosing and reporting the performance of national investment arms.

PNB’s annual report, for example, offers no details of its various investments in properties, fixed income securities and equities in terms of their geographical spread, sectors or returns. Khazanah Nasional Bhd releases its portfolio of listed companies at annual briefings but does not reveal its bottom line. ValueCap Sdn Bhd’s financial statements are available on its website but do not offer details of the investments it made. What is available is the fair value of the investments.

Perhaps a leaf ought to be taken from Singapore’s Temasek Holdings which discloses its financial statements along with detailed information of its investments by sector, geography and liquidity on its website and also offers information of the companies it invested in, providing details on when the investment arm bought into them, percentage held and the total return on the investment.

If Ekuinas, when it is set up, chooses to remain opaque in how it invests and allocates its funds, then it will no doubt attract criticisms that it is simply a tool to appease those who stand to lose from the liberalisation measures or that it is open to abuse by those in positions of power.

Malaysia is now on the cusp of either continued economic growth and diversification, or decline, if we do not get our investment policies right. While there are many more areas — not just within the economic sphere — where improvement will be needed, removal of restrictive policies that are not market-friendly is welcome indeed but care must be taken not to replace it with something even more onerous.

This article appeared in Corporate page of The Edge Malaysia, Issue 762, July 6-July 12, 2009