02 May 2008

IR has been slow in happening in Malaysia, but it is no doubt happening. There are a few fundamental reasons for this.

Here’s an example: Some 20 years ago retail investors tend to chase after hot tips, investing on hearsay, often not knowing anything about the company they are investing in other than its short name. Now you seldom see that happening. Retail investors have changed. They are smarter now. They read the business news, look for research reports, attend roadshows and invest according to sectors. They are not quite sophisticated yet but it’s a start.

With the growing desire for information by retail investors, they begin to ask more pertinent questions and demand better disclosure. This is pushing listed companies to do more IR.

There’s a second fundamental reason for the growth of IR in Malaysia. Malaysian companies today are investing abroad in a big way. While the government is pursuing FDI into the country, we are also seeing outgoing FDI by Malaysia companies expanding abroad.

For instance, lately there have been a number of large companies, such as banks, plantation companies, construction companies, infrastructure companies, leisure companies, who have invested abroad. Even smaller SMEs are establishing operations in places like China, Vietnam, India and Indonesia.

When these companies go abroad they begin to seek investment capital from international sources, issue foreign denominated instruments such as commercial papers or depository receipts, and consider overseas listing. All this require greater levels of disclosure and transparency. That is what the international markets demand for. These companies then become the first to follow international best practices of IR as expected by international investment banks and institutional investors. In time, more and more Malaysian companies will follow suit.

Therefore, it seems to me that IR will eventually proliferate in Malaysia as it has in the more developed countries. MIRA aims to hasten and promote its proliferation.

Have you seen our recent Investor Relations Poll
? Have a look.

Eddie Razak
May 2008

MIRA CEO and some members of the MIRA Board of Directors
From left: Eddie Razak, MIRA CEO; Justin Leong, MIRA Chairman (Genting); Arulnathan Michael Dass (Bursa Malaysia); Audrey Ho, MIRA Deputy Chairman (DiGi); David Berry (Columbus Circle); Lynn Goh (Bumiputra-Commerce); S Kalavathy (Tenaga Nasional); Judy Tan (Berjaya); Clarence Bourdville (Gamuda).

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