This article first appeared in The Edge Financial Daily on March 29, 2018
KUALA LUMPUR: The local stock exchange regulator, Bursa Malaysia Bhd, warned yesterday that it will probe listed companies that are suspected of submitting fabricated information in their public announcements.
Speaking to reporters after Bursa’s annual general meeting and extraordinary general meeting here, chief executive officer Datuk Seri Tajuddin Atan said companies suspected of falsifying information, especially to spur share price movements, will be investigated.
“In essence, it is my role to investigate if [companies] created or said something that is not right, not true, or cannot be backed up [with evidence], and their [share] price somehow or other moves away from its normal range,” said Tajuddin, adding that the stock exchange places priority in exercising integrity values.
According to Tajuddin, all public announcements filed with the stock exchange must be backed with complete data and factual information.
He also urged investors to source information from trusted avenues, such as official sites managed by the stock exchange, and not social media platforms.
Tajuddin was commenting on the controversial Anti-Fake News Bill 2018 recently tabled in Dewan Rakyat. Under the draft law, a person found to have commited an offence by knowingly creating or distributing wholly or partly false information will get a jail term of up to 10 years, or a fine of not more than RM500,000.
“The fake news conversation is not an issue that we look at favourably, and it should not and cannot enter our announcements if [the information contained] is not true,” he added.
As for how the US-China trade war would influence the local market, Tajuddin — who is one month away from marking his seventh year as Bursa’s CEO — said the impact is too early to gauge.
But Tajuddin noted that Malaysia has been reducing its dependence on the US and focusing more towards trades within the Asean region.
Moreover, as the deadline for parliament dissolution creeps nearer, Tajuddin said local market movements will more likely be driven by sentiments ahead of the upcoming general election.
Small- and mid-cap stocks on the local bourse took a beating last week when US President Donald Trump ordered tariffs on up to US$60 billion (RM231.6 billion) Chinese goods, sparking trade tensions between the world’s two largest economies. China reportedly said it would soon announce a list of retaliatory tariffs on US exports.
Last Friday, the FBM KLCI lost 11.65 points or 0.62% to close at 1865.22 after hitting its three-and-a-half-year high of 1,876.87 points a day earlier. The benchmark index continued to retreat this week and has retreated to 1,857.87 points as of yesterday’s close, down 7.35 points so far this week.
The FBM Small Cap Index, which lost 272.56 points or 1.56% last Friday to 15,207.67, has fallen another 255.24 points so far this week to close at 14,952.43 points yesterday, its lowest since January 2017.