KUALA LUMPUR: The Federation of Chinese Associations Malaysia (Huazong) has proposed for further extension of suspension of short-selling by the Securities Commission Malaysia (SC) and Bursa Malaysia Berhad (Bursa Malaysia), to at least another six months to one year, even after the Movement Control Order (MCO) is lifted.
Its president, Tan Sri T.C Goh said this is necessary in order to give sufficient time to public-listed companies who were adversely affected by the devastating impact of the Covid-19 pandemic and MCO, to recover.
He said this while welcoming the SC’s recent announcement that short-selling will be temporarily suspended until 30 April 2020. This suspension was introduced as part of the regulators’ proactive measures to mitigate potential risks arising from heightened volatility and global uncertainties. It involves intraday short-selling (IDSS) and regulated short-selling (RSS), as well as intraday short-selling by proprietary day traders. The suspension does not however apply to permitted short-selling (PSS).
“Huazong will be submitting a proposal to prime minister Tan Sri Muhyiddin Yassin, proposing the government to consider giving sufficient time to public-listed companies, especially those with sound background, track records and potential, for them to restructure and revive their businesses,” he said in a statement issued today.
He lamented that, while to a large extent, the public-listed companies were not covered by the ‘Prihatin Rakyat Economic Stimulus Package’ which the government announced on 27 March, they are undeniably the ‘umbrella’ for many small-and-medium enterprises (SMEs) in the country.
“If the public-listed companies are in deep trouble, the SMEs and many downstream sectors too will be facing a dire situation,” he said.
Goh recalled that following the government’s announcement of the RM250 billion ‘Prihatin Rakyat Economic Stimulus Package’, Huazong had proposed the government to immediately set up a Special Cabinet Committee to expedite the disbursement of the various aids under the said package, besides calling the Securities Commission to stop ‘short-selling’ and ‘force-selling’ activities in Bursa Malaysia, so as to allow the listed companies and investors to have sufficient cash-flow to stay afloat during this period of time.
While noting that the global stock market has been devastated by a series of events like the Covid-19 pandemic, global crude oil crisis, and political upheavals, he was nonetheless optimistic that Malaysia could still pull through, provided that the government promptly roll out comprehensive-and-effective stimulus package, as and when required, coupled with a good cooperation from the people and the business sector.
Meanwhile, he also welcomed and supported the SC’s unveiling of its four key priorities for this year, among others to ensure the Malaysian capital market remains orderly with ample liquidity and robust infrastructure despite facing the Covid-19 crisis which is impacting the global economy, and to temporary suspend short-selling until 30 April 2020 to mitigate potential risks arising from heightened volatility and global uncertainties.
“We welcome and support the Commission’s ongoing effort to alleviate the financial burden of investors, public-listed companies, distributors and agents during this difficult time, besides extending the deadline for submission of company audit report and quarterly financial report, encouraging companies to conduct virtual shareholders meeting, and extending the Practice Note 17 (PN17) or Guidance Note 3 (GN3) classification on companies which financial positions slip into the status, to 24 months,” he added.
Currently, there are 25 Main Market-listed PN17 companies and three GN3 companies on ACE Market which need to regularise their financial positions.
Goh underscored that it is absolutely important for the government to strive to ensure that the stock market in the country remains stable and healthy amidst an economic depression, by safeguarding the local public-listed companies which are the ‘umbrella’ for many businesses.- or/BNN
