Shareholders and investors are demanding more from the board of directors and management of PLCs they invest in
By BERNAMA / Pic by MUHD AMIN NAHARUL
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 Bhd 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-toaction 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 yesterday.
Abdul Wahid noted that during the GLC Transformation Programme back in 20042015, GLCs then became stronger companies with support from Khazanah Nasional Bhd.
He said the net profit of the then Group of 20 companies grew 10.2% 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 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 Covid19 hit Malaysia badly in 2020.
The earnings of FTSE Bursa Malaysia KLCI component stocks declined 4.3%, while the earnings for FBM Emas component stocks declined 1.2% over the fouryear period.
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% compared to neighbours Indonesia and Thailand, which were at 22.5% and 10.3% respectively.
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.
The launch of the programme witnessed the unveiling of its first of the five digital guidebooks titled “Creating Purpose and Performance-Driven PLCs”, which is now available for download on Bursa Malaysia website. — Bernama