KUALA LUMPUR (Aug 16): Government-linked companies (GLCs) should look at reducing their stakes in public-listed companies (PLCs) to help the capital market when it comes to a free float of shares.
During the course of a webinar titled “Market Outlook 2H2020 — Malaysia Equities: Reality Check”, Maybank Investment Bank (Maybank IB) head of retail research Tee Sze Chiah said GLCs like Petroliam Nasional Bhd (Petronas) could reduce their stakes to 51% in listed companies to help the Malaysian capital market to free float more shares.
“Petronas could potentially monetise its stakes in listed downstream entities. This could raise RM15 billion,” he said.
As it stands, Petronas controls 57.6% of MISC Bhd, 63.9% of Petronas Dagangan Bhd, 64.4% of Petronas Chemicals Group Bhd and 51% of Petronas Gas Bhd, on top of the 75.5% stake in KLCCP Stapled Group.
Tee explained that as well as helping with the further free float of shares in the market, which has been an issue for foreign funds when it comes to participating in the Malaysian market, the RM15 billion could be used for fiscal purposes when it comes to the government’s income and expenditure.
He said one way to possibly ensure that more shares are free floated in the market would be to link corporate tax benefits to free float levels for listed companies, something which has been done in Indonesia.