Malaysia wants to break up big firms without hurting stocks

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KUALA LUMPUR (BLOOMBERG) - Malaysia is considering the merits of having the state control its biggest companies, after moves to break up their dominance in sectors from the Internet to electricity led to declines in Asia's worst major stock market.. Read more at straitstimes.com.

KUALA LUMPUR - Malaysia is considering the merits of having the state control its biggest companies, after moves to break up their dominance in sectors from the Internet to electricity led to declines in Asia's worst major stock market.

State operator Telekom Malaysia was the first hit when the country slashed broadband prices as part of an election pledge. That triggered a loss of almost US$1 billion in its market value since May 2018. Now, power firm Tenaga Nasional is bracing for new players as the government moves to open up the retail electricity market. Its shares have slumped 18 per cent since September 2018 when the government first mooted the plan.

GOLDEN SHARES Public pension fund EPF, which owns a 16 per cent stake each in Telekom and Tenaga, said its investment income fell 7.6 per cent to RM13.5 billion ringgit in the third quarter from a year ago due to the decline in Malaysia's stock market. PNB announced its lowest income distribution since 1990 to unit holders of Amanah Saham Bumiputera, which owns 12 per cent of Telekom and 9 per cent of Tenaga.

Khazanah Nasional called for the government to move away from the practice of using golden shares to have clout over state-owned companies, and to wield its influence through legislation and regulators instead, managing director Shahril Ridza Ridzuan said at the same conference where Mahathir spoke on Tuesday in Kuala Lumpur. A golden share allows the government to outvote all other shareholders on certain matters, such as in appointing chief executive officers.

 

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