Impressed by the Australian Stock Exchange's (ASX) float on its own exchange, Malaysia was looking at possible similar move itself, according to the head of the Malaysian Securities Commission.
Commission chairman Ali Abdul Kadir today told delegates at the World Economic Forum that consideration of a float of the Malaysian stock exchange was part of a 10-year plan to develop its capital markets following the 1997-98 Asian financial crisis.
"Now that we have more or less recovered from the crisis I have initiated a capital market strategy to take the planning of the market for the next 10 years to the next level," he said.
"And one of the things that we do look at... is the possible listing of the Malaysian stock exchange.
"At this time I am not in a position to announce anything until I speak to my minister but I can say that we have studied the Australian model and it is very interesting. I think they have done the right thing," Mr Abdul Kadir said.
Australia's Finance Minister John Fahey told delegates the float of the ASX was not disruptive and that the government considered it was a good decision by the exchange.
"There has been very little impact on the way the market is operating," he told delegates. "It seemed an appropriate step at the time and it has been a good step."
Australia is one of three stock exchanges which have listed on their own exchange, the others being Hong Kong and London.
Meanwhile, delegates heard also there was probably little that could be done to prevent bogus information on companies hitting the Internet, and as in the recent case in Australia with Coles Myer, sending down the stock price.
PricewaterhouseCoopers country senior partner, Australia, Tony Harrington, said companies would have to keep up continuous disclosure and investors would have to seek financial information from sources with strong brand integrity.
"This issue of trust and integrity is quite important and it goes into the whole issue of continuous disclosure and being on top of it in the marketplace," he said.
"I don't think we will ever be able to prevent the circumstance where somebody puts out an error, and because of the way the markets react - which is very quickly - therefore certain misinformation will continue to exist and alway has in the marketplace.
"I hope that as the market develops that this area of integrity and trust, and good sources, will become a very important focus."
Mr Abdul Kadir said from Malaysia's perspective and there must be a wider harmonisation in the various regulatory frameworks in Asia, particularly in the area of company disclosures, to deter manipulative investors.
"There really is no time to waste. Internet is making the market global in nature. Regulators must get together and have a more consistent regulatory framework that would be consistent," he said.
Certainly disclosure based regulation and enforcement of those laws were key issues in financial markets in the Internet age, Zurich Financial Services global chief economist David Hale told the forum.
The US had a litigious culture to deal with such issues, but this would not be the right path for Asia.
"The responsibility therefore must be in the hands of the regulators and those who have the responsibility for enforcing full and fair disclosure," Mr Hale said.
ASIA PULSE
