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Malaysian investor group

seeks easier banking laws

KUALA LUMPUR: The Malaysian Investors' Association (MIA) has sought an easing of banking laws to allow more loans for buying stocks.

In a statement submitted to the finance ministry before a pre-budget weekend dialogue with Finance Minister Anwar Ibrahim, the MIA also urged the government to allow share buybacks by listed companies to stabilise stock prices and reduce liquidity in the market.

It said banks were allowed to commit just 15 percent of their loan portfolios to shares and the loans could not exceed 40 percent of the shares' market value, which was insufficient.

"We suggest that Bank Negara Malaysia should come up with a certain system of share financing to simplify the whole process, such as give a flat overall value of 50 percent for listed stocks (as loans)," the statement said.

The MIA said Malaysian listed companies with strong financial reserves should be allowed to buy back shares to help prevent hostile takeover attempts and stabilise stock prices.

In a separate memorandum to the finance ministry for the pre-Budget dialogue, Malaysia's Association of Merchant Banks called for the relaxing of immigration rules for banking professionals, the Business Times newspaper said.

It said there was a lot of bureacracy involved in recruiting expertise for Malaysian banks.

"With the opening of the Malaysian market, there will be greater demand for skilled labour. The banking industry will need to employ such manpower, particularly when introducing new products to keep pace with development," the memoranda said.

The merchant bankers' association also urged the government to let merchant banks promote the setting up of ASEAN (Association of Southeast Asian Nations) funds such as unit trusts or investment companies.-Reuter