KUALA LUMPUR: Public listed companies (PLCs) must undergo some transformation and improve their performance if investor interest were to be revived and sustained over a long period.
Bursa Malaysia chairman Tan Sri Abdul Wahid Omar said shareholders, including institutional investors and even retail investors have arrived at a point where they are demanding more from the board of directors and management of PLCs they invest in.
"These realities were part of the call-to-action arising from the corporate reform workshop hosted by Bursa Malaysia and the Economic Action Council Secretariat back in September 2020, and that led to the idea of kicking off a PLC Transformation Programme to spur growth among PLCs,” he said this virtually in his welcoming remarks at the physical launch of the programme today.
Abdul Wahid noted that during the GLC Transformation Programme back in 2004-2015, GLCs then became stronger companies with much support from Khazanah Nasional Bhd.
He said the net profit of the then group of G20 companies grew 10.2 per cent per annum from RM9.9 billion to RM26.2 billion, while their combined market capitalisation expanded 2.9 times from RM133.8 billion to RM386 billion.
Over the same period, total shareholder returns increased to 11.1 per cent per annum.
Meanwhile, Abdul Wahid said based on the Exchange’s Assessment of Corporate Malaysia, while the performance of PLCs had generally been on an upward trend between 2004 and 2015, PLCs showed a decline in profitability over the four years period of 2016-2019, even before the COVID-19 hit Malaysia badly in 2020.
The earnings of FBM KLCI component stocks declined 4.3 per cent, while the earnings for FBM Emas component stocks declined 1.2 per cent over the four-year period.
He said although the recent fourth quarter 2021 financial results announcement have been encouraging, it seems the earnings outlook for Malaysian corporates is still subdued.
Based on the MSCI Country Index between 2020 and 2022, he said the market’s forecast earnings per share and compound annual growth rate were among the lowest in the region at 2.5 per cent compared to neighbours Indonesia and Thailand, which were at 22.5 percent and 10.3 percent, respectively.
"Hence, today, we witness the launch of the PLC Transformation Programme -- but it will be simplified and broadened to include all PLCs,” he said.
Abdul Wahid said the success of the programme hinges on a holistic approach by industry, where PLCs, investors and regulators all come together to continuously encourage and guide one another in the journey of growth.
"My hope is to see wide participation from as many of our PLCs in this programme, which is light touch and non-prescriptive in nature, yet designed as tools to facilitate your journey of growth.
"Industry champions and corporate leaders' support is critical throughout the PLC Transformation Programme,” he added.
The launch of the programme today witnessed the unveiling of its first of the five digital guidebooks titled "Creating Purpose & Performance-Driven Public Listed Companies (PLCs), which is now available for download on Bursa Malaysia website.
The event was officiated by Finance minister Tengku Datuk Seri Zafrul Abdul Aziz. - Bernama