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Reuters: M'sia loses out in MSCI stock index re-jig
By Wong Choon Mei
21/5/2001 5:42 am Mon
[Malang demi malang sudah menimpa Malaysia tetapi rakyatnya
masih tidur lena terikut rentak diktaktor 'baik'nya yang
asyik menyalahkan orang lain dan globalisasi sebagai punca
negara semakin musnah dan binasa sedangkan sebenarnya politik
kroni menguasai segala-segalanya. Sudah menjadi kebiasaan di negara
kita kerajaan berpaut kepada kroni di mana-mana untuk menguatkan
mereka - tapi kali ini semua akan terkena - termasuk Ekran yang
sudah tidak bermaya dan banyak lagi yang dulunya memuncak langit
seronok hidup berbelanja.
Apakah seluruh negara akan sakit lantaran menyiksa seorang hamba
tuhan yang tidak berdosa?
Malaysia loses out in MSCI stock index re-jig
By Wong Choon Mei
KUALA LUMPUR (Reuters) - Malaysia's weighting will be cut
by more than half in a world stock index that tracks 49
countries, when a two-phase change is completed by compiler
Morgan Stanley Capital International by May 31, 2002.
A statement released by MSCI on Saturday showed Malaysia's
weighting will be lowered to 0.12 percent from 0.29 in the
provisional All Country World Free (ACWI) Index.
MSCI compiles a series of stock indices tracked by some
$3.5 trillion of global funds, making any major revamps a
much followed event by international investors.
The change harks back to December when the index compiler
said it would weigh stock indices using the number of
shares available for open trade -- so-called free float --
instead of solely on the basis of market capitalisation.
Ken Chang, vice president of global equity and derivatives
strategy in Merrill Lynch, Hong Kong, said Malaysia's
weighting in the widely-followed MSCI Emerging Markets Free
index would fall 31 percent to 3.99 from 5.78 percent.
"The cuts are more or less in line with our expectations,"
In the MSCI All Country Far-East Free ex-Japan, Malaysia's
weighting would be reduced by 37 percent to 5.4 percent
MSCI described free float as total shares outstanding,
excluding shares held by strategic investors such as
governments, corporations, controlling shareholders,
management and shares subject to foreign ownership
The change has been negative for Malaysia. With its high
number of firms controlled by the state or state-run
agencies, many stocks will see their weightings tweaked
Among Malaysian stocks most adversely affected by the
changes will be the top three market heavyweights -- Tenaga
Tenaga's weighting will be slashed 57 percent to 0.47
percent from 1.1, Telekom's by 54 percent to 0.52 from 1.14
and Maybank by 40 percent to 0.56 from 0.93 percent.
"Knee-jerk selling is likely and moves may be exaggerated
by thin trading," said fund manager Kenny Tjan, who helps
to manage $1.0 billion of stocks and bonds at
Singapore-based Rothschild Asset Management.
But a prolonged and heavy sell-off was unlikely as many
managers were already holding less than the prescribed MSCI
levels while those who still needed to unwind had time to
MSCI has staggered implementation of the free float changes
in two phases, beginning November 30, 2001 and ending May
LONGER TERM IMPACT
While another round of heavy disinvestment is not on the
cards, Malaysia's importance as a destination for foreign
portfolio capital will be dimmed seriously over the long
"Malaysia, along with many other Asian markets, has been
marginalised at the expense of the more developed and
globalised economies, such as Australia, Korea and Taiwan,"
To restore its weighting, Malaysian firms must be willing
to dance to the beat of globalisation, where more
shareholding and control is freed to the public.
Last year, $3.0 billion of foreign portfolio funds exited
the market for a host of reasons including excessive
government control and interference, corporate governance
and slow debt reform.
"A more sustainable catalyst is needed. And it must take
the shape of more market-driven policies. A hands-off and
less protectionist government policy would do wonders,"
said Tjan, adding that corporate governance was another
ADDITIONS AND DELETIONS
With the inclusion of free float factors, another 13
Malaysian stocks will be added to the MSCI list to beef up
market representation to 85 percent from the previous 60.
These are Courts Mammoth A total of 19 stocks will be dropped by MSCI.
They are ACP Industries
A total of 19 stocks will be dropped by MSCI.
They are ACP Industries