Annual Report 19 99 KLSE annual report PARTNERING TALENT WITH TECHNOLOGY
Entering a new millennium driven by technology, KLSE continues its successful partnership of people with technology. Our investment in technology is matched by our 19 human resource development. Our competitive edge is in the hands of talented people, developing and managing innovative technology, in the quest to make the KLSE a modern and efficient bourse of the new millennium. 99 Corporate Information 2 Executive Chairman’s Statement 4 Market Report 18 Issues In Focus 21 • Year 2000 Compliance • Capital Adequacy Requirements • Revamp of Listing Requirements • Informed Investing • Challenges for the Stockmarket Committee Members 32 Management Team 34 Contents Subsidiary And Related Companies 38 Calendar Of Events 52 Financial Statements 54 KLSE Sub-Committees 88 Monthly High, Low And Closing Indices 90 Volume, Value And Indices 92 New Listings 98 Membership Report 99 KLSE Members 104 Notice Of Annual General Meeting 116 Form Of Proxy /Certificate Of Representation • Kuala Lumpur Stock Exchange Corporate Information
Kuala Lumpur Stock Exchange (KLSE) (30632-P)
• Committee Members – Dato’ Mohammed Azlan Hashim • President – Dato’ Mohd Salleh Abdul Majid (Executive Chairman) • Deputy Presidents – Md Nor Ahmad Chan Guan Seng Ungku A Razak Ungku A Rahman (Deputy Chairman) • Company Secretary – Izlan Izhab Koh Kee Tee • Auditors – Messrs Hanafiah Raslan & Mohamad Dato’ Hwang Sing Lue • Tax Consultants – HRM (Tax Services) Sdn Bhd Mohaiyani Shamsudin • Bankers – Bumiputra-Commerce Bank Berhad Benny Ng Wu Hong Hongkong Bank Malaysia Berhad Dato’ Ranita Mohd Hussein Malayan Banking Berhad Tan Kim Leong • Registered Office – Kuala Lumpur Stock Exchange Abdul Kadir Hj Md Kassim 14th Floor, Exchange Square Bukit Kewangan 50200 Kuala Lumpur Tel: 03-206 7099 Fax: 03-206 3684
Securities Clearing Automated Network Services Sdn Bhd (SCANS) (109716-D)
• Board of Directors – Dato’ Mohammed Azlan Hashim • General Manager – Ungku A Razak Ungku A Rahman (Executive Chairman) • Company Secretaries – Izlan Izhab Chan Guan Seng Abdul Raihan Mohd Yusof Koh Kee Tee • Auditors – Messrs Hanafiah Raslan & Mohamad Dato’ Hwang Sing Lue • Tax Consultants – HRM (Tax Services) Sdn Bhd Mohaiyani Shamsudin • Bankers – Malayan Banking Berhad Benny Ng Wu Hong Multi-Purpose Bank Berhad Dato’ Ranita Mohd Hussein Southern Bank Berhad Tan Kim Leong • Registered Office – Securities Clearing Automated Abdul Kadir Hj Md Kassim Network Services Sdn Bhd Dato’ Mohd Salleh Abdul Majid 8th Floor, Exchange Square Dato’ Hj Megat Najmuddin Khas Bukit Kewangan Dato’ Sri Dr Hj Megat Khas 50200 Kuala Lumpur Md Nor Ahmad Tel: 03-206 8099 Fax: 03-206 3720 (Alternate director to Dato’ Mohd Salleh Abdul Majid)
Malaysian Central Depository Sdn Bhd (MCD) (165570-W)
• Board of Directors – Dato’ Mohammed Azlan Hashim • General Manager – Ungku A Razak Ungku A Rahman (Executive Chairman) • Company Secretaries – Izlan Izhab Datuk Amirsham A Aziz Ahmad Aznan Nawawi Chan Guan Seng • Auditors – Messrs Hanafiah Raslan & Mohamad Tan Kim Leong • Tax Consultants – HRM (Tax Services) Sdn Bhd Dato’ Seri Syed Zainol Anwar • Bankers – Bumiputra-Commerce Bank Berhad Jamalullail ibni Tuanku Syed Malayan Banking Berhad Putra Jamalullail Multi-Purpose Bank Berhad • Registered Office – Malaysian Central Depository Sdn Bhd 6th Floor, Exchange Square Bukit Kewangan 50200 Kuala Lumpur Tel: 03-206 2099 Fax: 03-206 3719
KLSE-Bernama Real-Time Information Services Sdn Bhd (KULBER) (152961-H)
• Board of Directors – Dato’ Mohammed Azlan Hashim • Company Secretaries – Izlan Izhab (Chairman) Abdul Raihan Mohd Yusof Prof Datuk Abu Bakar Abdul Hamid • Auditors – Messrs Hanafiah Raslan & Mohamad (Deputy Chairman) • Tax Consultants – HRM (Tax Services) Sdn Bhd Datuk Teh Ghee Kok • Bankers – Malayan Banking Berhad Dato’ Mohd Salleh Abdul Majid • Registered Office – KLSE-Bernama Real-Time Syed Jamil Syed Jaafar Information Services Sdn Bhd Shahzalan Adam 8th Floor, Exchange Square Md Nor Ahmad Bukit Kewangan (Alternate director to 50200 Kuala Lumpur Dato’ Mohd Salleh Abdul Majid) Tel: 03-206 8099 Fax: 03-206 3720
2 Annual Report 1999
Malaysian Share Registration Services Sdn Bhd (MSRS) (378993-D)
• Board of Directors – Dato’ Mohammed Azlan Hashim • General Manager – Abdul Nasir Ahmad Daud (Chairman) • Company Secretaries – Izlan Izhab Tan Sri Zulkifli Mahmood Abdul Raihan Mohd Yusof Mohamad Shuib Abdul Ghani • Auditors – Messrs Hanafiah Raslan & Mohamad Dato’ Hj Megat Najmuddin Khas • Tax Consultants – HRM (Tax Services) Sdn Bhd Dato’ Sri Dr Hj Megat Khas • Bankers – Malayan Banking Berhad Shanaz Radhiah Zulkifli • Registered Office – Malaysian Share Registration (Alternate director to Services Sdn Bhd Tan Sri Zulkifli Mahmood) 8th Floor, Exchange Square Haji Mustapha Hashim Bukit Kewangan (Alternate director to 50200 Kuala Lumpur Mohamad Shuib Abdul Ghani) Tel: 03-206 8099 Fax: 03-206 3720
The Kuala Lumpur Options & Financial Futures Exchange Bhd (KLOFFE) (261937-H)
• Board of Directors – Ramli Ibrahim • General Manager – S Loganathan (Executive Chairman/ • Company Secretaries – Izlan Izhab Acting Chief Operating Officer) Linda Song Mohamad Ariff Md Yusof • Auditors – Arthur Andersen & Co SA Vanar • Tax Consultants – Arthur Andersen HRM Tax Services & Co Dato’ Mohammed Azlan Hashim • Bankers – Malayan Banking Berhad Dato’ Mohd Salleh Abdul Majid Bumiputra-Commerce Bank Berhad Dato’ Ranita Mohd Hussein RHB Bank Berhad Dato’ Hwang Sing Lue Hong Leong Bank Berhad Mohd Ridzal Mohd Sheriff • Registered Office – The Kuala Lumpur Options & Omar Merican Financial Futures Exchange Berhad Chan Guan Seng 10th Floor, Wisma Chase Perdana (Alternate director to Off Jalan Semantan Dato’ Mohammed Azlan Hashim) Damansara Heights Md Nor Ahmad 50490 Kuala Lumpur (Alternate director to Tel: 03-253 8199 Fax: 03-253 5911 Dato’ Mohd Salleh Abdul Majid)
Research Institute of Investment Analysts Malaysia (RIIAM) (139281-V)
• Board of Governors – Dato’ Mohammed Azlan Hashim • Director – Haji Wan Fauzi Wan Mahmood (Chairman) • Deputy Director – Abdullah Naib Chan Guan Seng • Company Secretaries – Izlan Izhab Dato’ Ranita Mohd Hussein Abdul Raihan Mohd Yusof Tan Kim Leong • Auditors – Messrs Hanafiah Raslan & Mohamad Benny Ng Wu Hong • Tax Consultants – HRM (Tax Services) Sdn Bhd Dato’ Mohd Salleh Abdul Majid • Bankers – Bumiputra-Commerce Bank Berhad Prof Tan Sri Dato’ Dr Syed Jalaluddin • Registered Office – Research Institute of Investment Syed Salim Analysts Malaysia 6th Floor, Exchange Square Bukit Kewangan 50200 Kuala Lumpur Tel: 03-206 7099 Fax: 03-206 3701
Yayasan BSKL (464552-M)
• Board of Governors – Dato’ Mohammed Azlan Hashim • Company Secretaries – Izlan Izhab (Chairman) Abdul Raihan Mohd Yusof Chan Guan Seng • Auditors – Messrs Hanafiah Raslan & Mohamad Abdul Kadir Hj Md Kassim • Tax Consultants – HRM (Tax Services) Sdn Bhd Haji Abdul Karim Harun • Bankers – Malayan Banking Berhad Dato’ N Sadasivan a/l NN Pillay • Registered Office – Yayasan BSKL Dato’ Che Mohd Annuar 14th Floor, Exchange Square Che Mohd Senawi Bukit Kewangan Dato’ Syed Danial Syed Ahmad 50200 Kuala Lumpur Tel: 03-206 7099 Fax: 03-206 3684
3 Dato’ Mohammed Azlan Hashim Executive Chairman Annual Report 1999 Executive Chairman’s Statement
THE LAST YEAR OF THIS MILLENNIUM SAW THE KUALA LUMPUR STOCK EXCHANGE TAKING FIRM STEPS
ON STILL SHAKY GROUND.
IF IT TAKES PLAIN SPEAKING TO DESCRIBE THE MAGNITUDE OF THE EXPERIENCE, THEN PLAIN SPEAKING
MUST BE EXCUSED. THERE WERE SO MANY NEEDS TO ADDRESS AT ONCE. THERE WAS THE NEED TO
PROTECT, THE NEED TO REBUILD, THE NEED TO EXPAND AND GROW. AND ALL THESE TO DO, AGAINST
A BACKDROP OF CHALLENGES THAT NEVER SEEMED TO TIRE IN TESTING THE COLLECTIVE WILL AND
RESOLVE OF THIS ECONOMY, AND THIS NATION.
IF INDEED IT WAS A PERIOD OF ANTICIPATING THE WORST TO COME, IT WAS ALSO A PERIOD OF
PREPARING FOR THE BEST THAT HAS YET TO ARRIVE.
This was certainly the belief shared by the 17 new companies being listed on the Kuala Lumpur Stock Exchange (KLSE) for the period under review, raising RM474 million. As at the end of the financial year, the total number of companies listed on the KLSE was 745, with 458 companies listed on the Main Board and 287 companies on the Second Board.
As efforts to rebuild the economy, financial system and capital markets continued to be strengthened, the confidence which once ebbed from the economy, and the stockmarket, flowed to return.
The result was a series of record highs in the market, experienced to date. The highest ever daily volume of 1.6 billion shares was recorded on 12 July 1999. The highest ever daily trade transactions of over 450,000 trades, was also recorded on the same day. The highest ever daily order transactions of over 860,000 orders was recorded on 15 July 1999.
The overall investment environment we were operating in, however, was still characterised by recovery and growth. Fortunately, the effort did not stop short of just looking to rebuild and recover in the aftermath of past challenges.
As we stand together at the cusp of a new Millennium, allow me to ask: Are we truly mindful of the enormity of new challenges we may yet face in the coming age? Will we be standing on a strong foundation built from tested experience and knowledge, or are there shifting sands of fear and insecurity beneath our feet, as we usher in the new era?
5 Kuala Lumpur Stock Exchange
Executive Chairman’s Statement
Thus, in offering the following report, it is as much a testament of examining our efforts in an eventful time as it is an agenda for the many objectives sought ahead.
One such objective sought is Enhancing Market Transparency.
The recent experience of understanding and learning of weak spots that need to be strengthened, led to key amendments made to laws governing the securities industry – the Securities Industry Act 1983 and the Securities Industry (Central Depositories) Act 1991.
What this means for the KLSE in its role as market The new Rules also set significant parameters to regulator, is a tremendous opportunity to examine itself achieve greater clarity, transparency and consistency in and examine the industry to make it better by enhancing the conduct of business for stockbroking companies. market transparency. Consequent to these amendments, The key areas include:- changes were made to the rules of the KLSE in operating its clearing house – Securities Clearing • best business practice Automated Network Services Sdn Bhd (SCANS) and its • dealing in securities central depository – Malaysian Central Depository • rules on trading Sdn Bhd (MCD). Changes were also made to the • delivery and settlement KLSE’s rules governing stockbroking companies. • financial resources and accounting requirements • audit regulations For MCD, it meant an improvement towards the • disciplinary actions trading and ownership of securities to be undertaken by only beneficial owners or authorised nominees. To enhance transparency in securities trading, Securities transfers between accounts have been new disclosure requirements were introduced on restricted to certain approved reasons only; whilst the 31 August 1998 requiring stockbroking companies to deposit of scrip of all prescribed securities is made take all reasonable measures to know their clients – mandatory except under certain instances. when these clients deal on behalf of other persons, to disclose the identity of those other persons. On the part of stockbroking companies, the benefits of strengthening the rules were immediately apparent in To reinforce this, stockbroking companies were their operations as well as to their clients – investors no longer permitted to engage in ‘off-market’ dealings, at the KLSE. except only in the form of Direct Business Transactions (DBTs). The KLSE’s new Memorandum & Articles (M&A) and Rules took effect from 1 July 1999. The new M&A and DBTs are to be cleared and settled through SCANS, Rules incorporated new and enhanced measures and the rules of KLSE and SCANS were amended adopted to strengthen the stockbroking industry. to accommodate the clearing and settlement of DBTs.
6 Annual Report 1999
Price limits on securities transacted in DBTs were imposed on 22 March 1999. The effect was that stockbroking companies were generally no longer permitted to transact DBTs where the price limits were breached, unless in corporate exercises, mergers or take-overs involving genuine acquisitions or disposal of shares which satisfy the prescribed criteria.
In continuing the effort to provide professionally managed and financially strong conduits for investors to access the stockmarket, prudential standards and requirements were adopted for stockbroking companies. To enhance investor confidence and participation in the stockmarket, dealings between stockbroking KLSE issued standards for the classification and companies and their clients – investors of the KLSE – treatment of interest on non-performing accounts. were also examined with care. The proposed client Standards were also issued for the provision for bad asset protection rules relating to stockbroking and doubtful debts in the financial statements of companies’ dealings with clients’ assets and the stockbroking companies, effective from any financial mandatory minimum criteria to conduct margin year beginning after 1 July 1999. These standards, financing activities, are being finalised for introduction under the new Rule 16A for stockbroking companies, in the next financial period. achieves the significant objective of ensuring consistency in the recognition of interest income on To address the concerns of participants in the conduct non-performing accounts and the provision for bad of stockbroking activity, the KLSE approved a standard and doubtful debts. remisiers’ agreement, which took effect on 9 February 1999. The agreement, whilst seeking overall equitable At another level, to ensure the liquid capital of a protection for stockbroking companies and remisiers, stockbroking company is sufficient to cover its total also covers the significant areas of:- measured risks, the Capital Adequacy Requirements (CAR) was made effective on 28 May 1999. CAR is a • Duties and obligations of remisiers risk-based financial monitoring tool with separately • Remisiers’ security deposit identifiable measures for the specific risks associated • Remisiers’ commission with a stockbroking company’s business. CAR is • Remisiers’ transfer presently running parallel with the existing monitoring • Rights of the stockbroking company tool, the Minimum Liquid Funds computation. • Duties of the stockbroking company
7 Kuala Lumpur Stock Exchange
Executive Chairman’s Statement
Just as the foundation building measures for stockbroking companies were carefully but surely put in place, there was no let up in our monitoring for compliance and enforcement efforts, in dealing with improper conduct. Of the over six hundred cases brought forward and initiated during the period under review, more than half were completed. The following is a snapshot of KLSE’s compliance and enforcement efforts:-
Status Of Investigation Cases As At 30 June 1999
Cases Brought Cases Initiated Forward From During Total Cases Cases Category Financial Year 1998 Financial Year 1999 Cases Completed Outstanding
Buying-ins/potential short selling 2 124 126 92 34
Alleged defaulters 10 123 133 39 94
Potential misuse of clients’ accounts 56 61 117 42 75
Other complaints of improper conduct against dealers’ representatives 38 50 88 51 37
Complaints of improper conduct against stockbroking companies 59 75 134 89 45
Potential false trading/market rigging/ market manipulation /insider trading 3 19 22 6 16
General complaints 14 8 22 19 3
Total 182 460 642 338 304
Disciplinary Actions On Dealers’ Representatives And KLSE LINK. As an internet-based, electronic document Stockbroking Companies During Financial Year Ended management system, the KLSE LINK enhances the 30 June 1999 content, consistency and timeliness of corporate Dealers’ Stockbroking Disciplinary Action announcements. Representatives Companies
Struck off 19 — With the KLSE LINK, public listed companies and Suspended and fined 3 — merchant banks will have a secure and efficient infrastructure to submit corporate announcements to Fined 14 4 the KLSE. Investors, in turn, will have timely and easy Reprimanded — 2 access to these announcements via the KLSE web-page Total 36 6 at www.klse.com.my.
The effort in building a secure and efficient stockmarket In order to achieve wider dissemination of is complemented by the task of making such a announcements, the KLSE LINK supplements the stockmarket attractive for sustained investment and active existing Maklumat Saham (MASA) – the KLSE’s trading. Working towards such an objective is part of the real-time share information system. duty of the KLSE in Enhancing Corporate Disclosure. A significant part of the corporate announcements now KLSE’s objective in enhancing corporate disclosure was available through the KLSE LINK is the Quarterly achieved at many levels – in offering efficient systems Reporting of Financial Statements by Public Listed and services and in fine-tuning rules and regulations. Companies. The requirement for quarterly reporting was announced on 11 March 1999, very much in line One such service, which makes a significant with KLSE’s emphasis for greater corporate disclosure contribution in enhancing corporate disclosure, is the in content and frequency.
8 Annual Report 1999
5 Announcements on the 1 Prepare announcements KLSE web site available locally using the KLSE LINK for public access • HOW THE KLSE LINK FUNCTIONS PLCs • KLSE LINK KLSE WEB Merchant Banks • Server Server Company Secretaries • Internet Internet Investors • SBCs • Researchers & Analysts • Academicians
2 Connect to KLSE LINK 3 Announcements 4 KLSE verifies announcements via the Internet electronically submitted and disseminates via KLSE to the KLSE LINK server web server KLSE LINK This quarterly reporting by public listed companies The new policy addresses:- seeks to:- • reasons for suspension requests by public listed • make available to the investors material information companies. on the financial position of the public listed • consideration to grant a request for suspension. companies in a timely, adequate and accurate • material announcements relating to the request for manner to aid investors in making informed suspension. investment decisions. • reduction in the suspension period. • reduce the investment risk for investors as the timely, regular and updated financial information The policy benefits shareholders and investors by enables investors to better determine the returns enabling greater control in the conduct of their and sustainability of their investment. investments through the continued trading of • increase accountability of public listed companies securities, unless suspension is necessary for as increased frequency in financial reporting will dissemination of information or to maintain a fair and result in keeping the market informed of the orderly market. Its implementation also enhances the financial position of public listed companies on a responsibility and accountability of public listed more regular basis. companies in making corporate announcements and • enhance corporate governance among public listed corporate disclosure. companies as corporate activities and the results thereof are made more transparent to investors. As a further step to promote corporate responsibility and accountability for companies listed on There has been a high degree of support for KLSE the KLSE, on 11 March 1999, Restrictions on the by public listed companies in making quarterly Number of Directorships, was announced. reporting with a compliance rate of 98% for reports In implementing the restrictions, KLSE addressed due 30 September 1999. the corporate governance issues arising from multiple directorships by allowing directors of Submission Of Quarterly Reporting Ð For Quarter Ended 31 July 1999 public listed companies to:-
Submission Statistics No Of Companies • devote more and sufficient time and energy to the Total number of Quarterly Reports boards that they represent. due on 30 September 1999 93 • acquire a higher level of understanding of each Total number complied 91 company’s business. Failure to submit by due date * 2 • minimise or even eliminate conflict of interest Compliance rate 98% between their duties to different companies or between their duty to the company and their Note:- *Of the two companies which failed to submit, one subsequently submitted on 1 October 1999. self interest. • improve a director’s independence and enhance This high compliance rate is testimony to the resolve of the ability to effectively monitor the company’s public listed companies to further enhance their executive management. standards of transparency and accountability, and the KLSE commends them for this effort. Given the recovery condition of the period under review, it became more important than ever to have With greater availability of corporate information and the dedicated services of directors on the board of greater corporate disclosure to promote participation in public listed companies to further strengthen the the stockmarket, investors would also benefit from the financial and operational monitoring of the respective continuation of the fair and orderly trading of companies. The restriction is also a means of securities. This forms one of the major considerations promoting investor confidence in the public listed for KLSE in Strengthening its Suspension Policy. companies that make our market.
9 Kuala Lumpur Stock Exchange
Executive Chairman’s Statement
Under the new requirements, a director of a public The amendments include the following:- listed company shall not hold more than 25 (a) Ensuring that all new securities are issued by directorships in companies of which:- way of crediting the securities account of • the number of directorships held in public listed entitled persons. companies shall not be more than 10, and (b) Increasing the penalty that may be imposed • the number of directorships in other companies ie. against a public listed company which breaches other than public listed companies, shall not be the Listing Requirements, to RM1 million. more than 15. A new set of guidelines was also issued on 1 November 1998, to govern the purchase of own Applicable only to directors of public listed shares by public listed companies. companies, they had until 30 September 1999, six months from the date of implementation of 1 April • Malaysian Code on Take-Overs and Mergers 1999 1999, to file statutory declarations with the KLSE, The Listing Requirements were also amended upon confirming full compliance with these requirements. the implementation of the new Malaysian Code on Take-Overs and Mergers 1999. The relevant The blueprint for the investibility of Malaysian provisions in the Listing Requirements were companies listed on KLSE is largely contained in strengthened to enhance disclosure and transparency. the Listing Requirements. To continue having a comprehensive view of the practical requirements of As in KLSE’s governance over stockbroking companies, the industry, the Listing Requirements are continuously which seeks to strike a balance between developmental reviewed to ensure that they are consistent with the and enforcement efforts, similarly, there was also laws and to address the needs of the industry and continued vigilance in the supervision of the conduct investors. Some of the significant changes made to the of public listed companies. Listing Requirements for the period under review are:-
• Rationalisation with the securities laws In conjunction with the amendments to the securities laws, the Listing Requirements were also amended to ensure consistency with the new laws.
10 Annual Report 1999
Actions Taken For Breaches Of Listing Requirements From July 1998 To June 1999
No Of Cases
Type Of Cases Public Caution Private Public Reprimand Total & Impress Reprimand Reprimand & Fine
Breaches of Corporate Disclosure Policy on immediate public disclosure of material information – Section 335 of MBLR, Clause 1.18 of SBLR 1 — 2 4 7
Breaches of Disclosure on Acquisitions and Realisations – Sections 36-37, 114-115 of MBLR, Clauses 3.15, 3.16, 5.4-5.6, 5.8 of SBLR — — 7 6 13
Non-compliance of the notice for Books Closing Date – Section 23 of MBLR — 1 — — 1
Failure to release Half Yearly Results on time – Section 56 of MBLR/Clause 3.20 of SBLR — — 4 — 4
Failure to release Preliminary Financial Statement on time – Section 57 of MBLR/Clause 3.21 of SBLR — 3 — 2 5
Failure to furnish Annual Report on time – Section 60 of MBLR/Clause 3.22 of SBLR — 9 1 16 26
Total 1 13 14 28 56
Status Of Investigation Cases On Public Listed Companies As At 30 June 1999
Cases Brought Cases Initiated Forward From During Total Cases Cases Category Financial Year 1998 Financial Year 1999 Cases Completed Outstanding
Corporate Disclosure Policy of the KLSE 1 12 13 9 4
Acquisitions and Realisations — 39 39 19 20
Deferment of dividend payment — 1 1 1 —
Failure to make immediate disclosure of winding-up petition and appointment of receiver & manager — 2 2 — 2
Non-compliance of the notice for Books Closing Date – Section 23 MBLR — 1 1 1 —
Failure to release Half Yearly Results on time – Section 56 MBLR/Clause 3.20 SBLR 2 4 6 6 —
Failure to release Preliminary Financial Statement on time – Section 57 MBLR/Clause 3.21 SBLR 5 5 10 10 —
Failure to furnish Annual Report on time – Section 60 MBLR/Clause 3.22 SBLR 3 25 28 28 —
Total 11 89 100 74 26
Note:- MBLR – Main Board Listing Requirements SBLR – Second Board Listing Requirements
11 Kuala Lumpur Stock Exchange
Executive Chairman’s Statement
With enhanced corporate disclosure and better companies and information on the KLSE Group and investment opportunities provided by a larger number securities markets. of public listed companies developing exemplary conduct, KLSE continues to emphasise the need to Towards the continued growth and development of the Enhance Investor Education. KLSE, the progress made thus far in developing rules, measures, systems and services, are made possible in KLSE Group’s training arm, Research Institute of the strategic partnering of KLSE’s talented human Investment Analysts Malaysia (RIIAM), organised resources with innovative technology. 154 training sessions encompassing both in-house and public programmes. For the period of January – June In Improving Information Technology, KLSE continues 1999 alone, RIIAM conducted 118 training sessions. to streamline, fine-tune and upgrade its information technology systems. During the period under review, 85 sessions of in-house training programmes comprising technical The broker front-end trading system, WinSCORE, and soft skills were conducted for KLSE Group. was enhanced to include:- RIIAM developed its own modules for Staff Development • Improved company announcements in terms and Management Development Programmes and of content and display format. The improvement a total of 1,823 participants attended the programmes. on the timeliness and content of company announcements is made possible by the The RIIAM Diploma in Investment Analysis programme KLSE LINK. is in its sixth year of operations. At present, a total of • Introduction of an Investor Alert Indicator to 7 classes are being conducted, with 3 classes in Kuala highlight critical financial information of public Lumpur, 2 classes in Penang and another 2 classes in listed companies which require closer monitoring Kuching. The close co-operation between RIIAM and by investors. the Royal Melbourne Institute of Technology (RMIT), • Changes to the direct business transaction module since 1994, has seen 420 graduates of the RIIAM to be compliant with the KLSE’s new rule on direct Diploma in Investment Analysis. Graduates of this business transactions. diploma are strategically placed to contribute to the development of a well-informed investing community, The KLSE Help Desk Online Services System, who would base their investment decisions more on an internet-based system, was introduced to all fundamentals and less on sentiments and perceptions. stockbroking companies on 15 January 1999. The service was introduced with the aim of improving RIIAM is also negotiating with local universities to KLSE’s communication to stockbroking companies, offer the diploma programme concurrently with their facilitate timely dissemination of circulars and provide bachelors degree programmes. A part-time bachelors a broad spectrum of information on the information degree, in collaboration with RMIT, is also being technology services provided by the KLSE Group. formulated; this will offer yet another flexible, cost-effective option for professionals to obtain a Another system, the Message-Based Middleware recognised and relevant degree. System, fully implemented in October 1998, revolutionised the manner in which messages are sent For the year under review, the network of investor from the central trading system and the broker front- information centres – Balai Maklumat BSKL - end trading system. With its implementation, average expanded, to now include cities like Penang, response time improved by more than 50% to Johor Bahru and Kuching, in addition to the Public 3 seconds or less for about 99% of transactions. Information Centre in Kuala Lumpur. Other benefits gained include:-
KLSE’s network of Balai Maklumat is a valuable • More than 1,100 units of personal computers used repository of investment information and provides the as gateways to the central trading system could be latest information on public listed companies, market re-deployed to be used for other purposes by analysis reports, trading reports of public listed the stockbroking companies.
12 Annual Report 1999
• Improved security of message transmission. An external independent auditor was engaged to • More efficient usage of the network and also specifically review and ensure that all processes and improved network availability. activities carried out by the KLSE Group address the Y2K problem comprehensively. Given the trend towards increasing use of information technology and electronics, the KLSE introduced the In addition, the KLSE Group has developed detailed Electronic Client Ordering System (ECOS) Code in action plans towards the full development of November 1995. The code was to guide stockbroking comprehensive contingency plans. companies to implement services related to ECOS, such as electronic order routing and trade confirmation Y2K Compliance Of Public Listed Companies For 1999 to clients. Stockbroking companies approved to Public Listed operate ECOS have since introduced internet-based Companies’ Y2K Main Board Second Board Compliance Status services for order routing and trade confirmation. October 1999 412 89.18% 266 93.66%
In dealing with the most significant issue of Year 2000 November 1999 440 95.24% 277 97.53% (Y2K) Compliance, no effort has been spared, including industry-wide tests, to ensure that all mission December 1999 462 100% 284 100% critical systems continue to operate reliably before, on and after the year 2000. The KLSE regularly updates its Y2K status on its web site – www.klse.com.my. The objective is to minimise the impact to the Malaysian securities market upon the roll-over to the With improvements in information technology, equal if new Millennium. Various levels of testing were not greater emphasis is placed by the KLSE on conducted ranging from unit tests to End-to-End Developing its Human Resources. Industry-Wide Tests. A group restructuring, effective 1 February 1999, was To date, 4 Y2K End-to-End Industry-Wide Tests undertaken in line with the expansion of KLSE’s role in have been conducted, involving various industry strengthening the securities industry. The reinforced participants. The purpose of these tests is to allow structure of the KLSE is to achieve:- industry participants to perform integrated testing of their systems with the KLSE Group systems. • a unified decision making structure to ensure greater consistency in the enforcement of rules, Currently, the KLSE Group and all stockbroking regulations and requirements, companies are Y2K compliant, whilst over 95% • an organisation of increased capability for of public listed companies will be Y2K compliant innovation, growth and industry development, by November 1999. • a greater scope for co-operation with the government, Ministry of Finance, other regulators Y2K Compliance Of The Securities Industry and industry participants. As At October 1999
KLSE Group Of Companies 100%
Stockbroking Companies* 100%
Public Listed Companies + Main Board 89.18%
Second Board 93.66%
Note:- *For stockbroking companies, 61 active members are fully compliant while 2 inactive members (Labuan Securities and Halim Securities) are not compliant and have been suspended from trading. +For the 746 public listed companies comprising 462 Main Board companies and 284 Second Board companies, full compliance is expected by December 1999.
13 Kuala Lumpur Stock Exchange
Executive Chairman’s Statement
With the restructuring exercise, the manpower resources will be used more efficiently and effectively to achieve the KLSE’s operational objectives. More than 200 staff within the KLSE Group were involved in the restructuring exercise. The rationalisation also included the establishment of several new divisions and departments.
KLSE COMMITTEE
EXECUTIVE CHAIRMAN'S OFFICE AUDIT SUB-COMMITTEE
GROUP HUMAN RESOURCE
GROUP INTERNAL EXTERNAL AUDIT AUDITOR EXECUTIVE CHAIRMAN POLICY & DEVELOPMENT
MARKET SUPERVISION GROUP
RIIAM
KLOFFE PRESIDENT
DEPUTY PRESIDENT DEPUTY PRESIDENT
FINANCE, TREASURY INFORMATION LISTING GROUP SUPPORT SERVICES & ADMINISTRATION TECHNOLOGY
• Operations • Finance • SCANS • Facilities Management • Financial Review & • Treasury • MCD • Information Services / Surveillance • Administration • KULBER Information Technology • Legal Advisory • MSRS
CORPORATE & PUBLIC MARKET GROUP LEGAL AFFAIRS INFORMATION INFRASTRUCTURE COMMUNICATIONS
• Legal • Research / Publications • Group Corporate Affairs • Public Information Centre • Membership • Industry Specialists
KLSE Subsidiary and Related Companies / External Auditors
With the improvement in the nature of work of the Quotation Berhad (MESDAQ) to provide clearing, past, new patterns of work have emerged. Previous settlement and depository services. These services work patterns have been modified and new ones were first used following the commencement added to suit the changing needs of the investors and of its operations on 30 April 1999. To date, investment environment. 23 stockbroking companies are subscribing to more than 230 WinMESDAQ terminals. In continuously improving its role and responsibilities, the KLSE Group continued its contribution to In broadening investment options, the KLSE Syariah Developing the Securities Industry in exploring Index (KLSE SI), was launched on 17 April 1999. opportunities to broaden and deepen the industry. The launch of the KLSE SI is to cater for increasing demand by local and foreign investors who seek to KLSE Group entered into an agreement with the invest in securities and instruments which are in line Malaysian Exchange of Securities Dealing & Automated with Syariah principles.
14 Annual Report 1999
AS AN INSTITUTION INTEGRAL TO THE MALAYSIAN ECONOMY,
THE KUALA LUMPUR STOCK EXCHANGE IN LOOKING
FORWARD WILL CONTINUE TO CONTRIBUTE SIGNIFICANTLY TO
THE MOBILISATION OF CAPITAL, THE CREATION AND
DISTRIBUTION OF WEALTH AND SUPPORTING THE
GOVERNMENT IN IMPLEMENTING NATIONAL POLICIES.
The KLSE SI is a weighted-average all share index with ISS is a significant development in the KLSE’s move to its components currently made up of 274 Main Board continually improve and place itself on par with other companies approved by the Syariah Advisory Council jurisdictions in terms of settlement of trades. There is (SAC) of the Securities Commission. no doubt that the ISS will facilitate increased institutional participation in the KLSE. In ensuring that the KLSE SI closely reflects the latest developments and changes in Syariah To date, 12 institutions comprising institutional approved investments, the KLSE SI components investors and custodian banks have been approved as will be periodically updated in line with SAC’s list Non-Trading Clearing Members to benefit from the ISS. of approved securities. Jawatankuasa Antara Agensi Kawalselia (JAK), On 3 May 1999, the KLSE announced that it had a committee comprising regulatory agencies involved enhanced foreign interest in Malaysian shares through in the capital market and securities industry was the regulation of depository receipts. The regulation established in April 1999. JAK was formed to discuss of depository receipts was put in place with and enhance the co-ordination of cross-jurisdictional amendments to the KLSE’s Listing Requirements as well issues and developmental matters. The Ministry of as the rules of MCD. Finance, Bank Negara Malaysia, Securities Commission, Registrar of Companies and KLSE are the members of Among the important benefits the regulation of JAK with KLSE acting as the Secretariat. depository receipts will achieve, in contributing to enhancing foreign interest in Malaysian shares, are:- To encourage and further enhance the participation of Bumiputera in the securities industry, the KLSE • increase the profile and liquidity of Malaysian established a Bumiputera Unit. Since its establishment, shares whilst enabling Malaysian companies to the Unit has been involved in dialogue sessions, maintain an international profile. exhibitions and meetings with various Bumiputera • provide foreign investors with options to trade in bodies and agencies to promote their involvement in Malaysian securities. the securities market. • attract long-term investors. KLSE completed its acquisition of KLOFFE Berhad, the To facilitate the settlement of trades of investors operator of the Kuala Lumpur Options and Financial directly with the clearing house, the KLSE launched Futures Exchange (KLOFFE), on 31 December 1998. the Institutional Settlement Service (ISS) on 15 July The acquisition was a step forward in enabling the 1999. Offered by SCANS, the system enhanced the rationalisation of equity and derivatives markets and current Delivery versus Payment (DVP) environment the optimal utilisation of resources for both the by extending the clearing membership to include securities and future exchanges. KLSE’s participation in resident custodian banks and institutional investors as the futures industry is expected to further enhance the Non-Trading Clearing Members. development of the securities industry.
Whilst the KLSE’s present T+5 rolling settlement In 1998, the KLSE conducted a joint survey with system remains, the ISS provides an additional PricewaterhouseCoopers on corporate governance. option for institutional investors and custodian A key finding of the survey was that corporate banks to participate directly in the clearing and governance is an essential factor in enhancing investor settlement process. confidence.
15 Kuala Lumpur Stock Exchange
Executive Chairman’s Statement
Over half of the institutional groups surveyed indicated advices in Bahasa Malaysia and English. The availability that if further improvements were made to the of CDS forms in Bahasa Malaysia enables MCD to prevailing corporate governance regime, they would be facilitate more investors to open CDS accounts in encouraged to invest in Malaysia. Almost one third order to invest in the stockmarket. indicated that the prevailing standards of corporate governance are an incentive for investing in Malaysia. The KLSE, in seeking to grow and develop further by learning and understanding from industry The survey findings served as valuable input to the participants, locally and abroad, continued to focus Finance Committee on Corporate Governance in on Strengthening International Relations. formulating their recommendations. KLSE hosted four major international events namely:- On 16 November 1998, the KLSE, in recognising the • FIBV Annual General Assembly from 25 – 27 contribution by various other institutions to the securities October 1998. industry, extended the categories of institutions eligible • Association of National Numbering Agencies for rebates on brokerage commission to include:- (ANNA) Extraordinary General Meeting from • life insurance companies 30 November – 1 December 1998. • general insurance companies • Asian Securities Analysts Federation (ASAF) Annual • superannuation or employees provident funds General Meeting & Conference 1999 from 10 – 12 • finance companies October 1999. • asset management companies and unit trust • International Council of Investment Analysts (ICIA) management companies Biannual General Meeting 1999 on 10 October 1999. • trust companies or institutions FIBV is the international federation of 54 stock exchanges This rebate reduces transaction costs for the institutions. whilst ANNA implements and maintains standards and Greater participation from institutions in the stockmarket practices to facilitate cross border trading and settlement. is expected to encourage longer term investments based ASAF represents over 23,000 investment professionals on fundamentals, leading to greater market stability. from 12 member countries including Japan, Taiwan, Hong Kong, Australia, New Zealand and Malaysia. Beginning February 1999, investors can obtain ASAF is a member of ICIA – an international Bahasa Malaysia Forms from their stockbroking organisation for securities analysts’ societies in Europe, companies, to facilitate the following services:- North America, South America and Asia.
• Opening and closing of CDS accounts KLSE also participated in the East Asian and Oceanian • Updating of CDS accounts Stock Exchanges Federation (EAOSEF), which is a federation of 13 member stock exchanges. Since December 1998, CDS account holders have been receiving bilingual monthly statements and KLSE was admitted as an affiliate member of the International Organisation of Securities Commissions (IOSCO) in May 1999. IOSCO has 164 member societies worldwide.
The KLSE Group in setting the standard for the role of corporate citizens in Providing for the Community, has made contributions to a number of organisations via Yayasan BSKL, which was established in 1998. To date, Yayasan BSKL has contributed RM260,465 to benefit organisations including children’s homes, homes for the elderly, the disabled and the poor.
The KLSE Group also initiated an industry contribution to the JE Trust Fund. The KLSE Group together with
16 Annual Report 1999
17 stockbroking companies and 140 public listed • Dealing with globalisation and liberalisation. companies contributed RM1 million. The special fund • Dealing with the challenges of a borderless market. was set up not only to provide assistance to victims of • Reviewing the role of securities industry participants the Japanese Encephalitis virus but also to sponsor the in light of internet trading, electronic broking, cross activities involved in containing the outbreak. border trading and listing.
In building the Milestones to the Millennium, KLSE Key among these challenges is the increasing dominance launched the KLSE Corporate Awards at the inaugural of an investors’ market and shareholders’ activism, which Evening with KLSE Listed Companies on 18 August will drive stockmarkets to look even more critically at 1999. More than 700 senior representatives from over operations and systems, changing them, recreating them 500 public listed companies attended the event. to meet these evolving requirements. The awards serve to recognise and honour public listed companies with excellent corporate conduct. The present push forward will continue, so as to The awards seek not only to reward the deserving, but achieve an efficient, cost effective and secure market, also to continue to motivate and develop high standards in making the KLSE an exchange for the Millennium. of corporate conduct among public listed companies. In closing, our Commendations to the KLSE Committee The KLSE Corporate Awards will be presented annually Members for the well considered guidance and commencing with the KLSE Corporate Awards 2000. direction, the close support and co-operation, in All public listed companies will have until next year to managing the challenges of the year. vie for the awards. To the Boards of Directors of Securities Clearing As in previous years, through the National Annual Automated Network Services Sdn Bhd, Malaysian Corporate Report Awards (NACRA) 1999, KLSE Central Depository Sdn Bhd, The Kuala Lumpur encourages public listed companies to use the medium Options & Financial Futures Exchange Bhd, KLSE- of annual reports to provide shareholders more Bernama Real-Time Information Services Sdn Bhd, information on the companies’ initiatives and Malaysian Share Registration Services Sdn Bhd and the objectives, adherence to corporate governance, audit Boards of Governors of the Research Institute of committee report and value added information Investment Analysts Malaysia and Yayasan BSKL – on employees, fixed assets and employment costs. thank you all for your dedication and commitment to The information is to enable investors to make more the KLSE Group. informed investment decisions. On behalf of the KLSE Committee, our sincere For the year 2000, a new award on environmental appreciation to the Right Honourable Prime Minister in reporting has been introduced to address and recognise guiding policies for continued growth and improvement. efforts towards its preservation. Our acknowledgement for the support of the Ministry of Finance, Securities Commission, Bank Negara As an institution integral to the Malaysian economy, the Malaysia, Registrar of Companies and related regulatory KLSE in Looking Forward will continue to contribute authorities in working closely together. significantly to the efficient mobilisation of capital, the creation and distribution of wealth and supporting To all staff of the KLSE Group, we appreciate and the government in implementing national policies. value greatly your belief and continued dedication to the organisation, which has benefitted from your effort, Even as we talk of a transition into the next Millennium, professionalism and contribution. lest we forget, transition is not only transformation, it is also creation. In working together, we unite in building a progressive KLSE for the new Millennium. In creating a Millennium for ourselves, our readiness and capability will depend on numerous factors, including:-
• Emphasising information technology as a useful DATO’ MOHAMMED AZLAN HASHIM mechanism to channel valuable and scarce resources. Executive Chairman
17 Kuala Lumpur Stock Exchange Market Report 1 July 1998 to 30 June 1999
30.06.1999 vs 30.06.1998
KLSE Indices 30.06.1999 30.06.1998 Points Change % Change
EMAS 207.56 115.36 92.20 79.92
Composite 811.10 455.64 355.46 78.01
Industrial 1,380.58 915.83 464.75 50.75
Consumer Products 169.52 121.18 48.34 39.89
Industrial Products 86.44 56.96 29.48 51.76
Construction 237.39 93.27 144.12 154.52
Trading/Services 128.84 71.07 57.77 81.29
Finance 6,328.23 2,419.22 3,909.01 161.58
Property 1,064.73 580.35 484.38 83.46
Plantations 1,766.92 1,604.78 162.14 10.10
Mining 264.46 153.35 111.11 72.46
Syariah* 125.65 ———
Second Board 179.77 97.99 81.78 83.46
Note:- * launched on 17.4.1999
The financial year ended 30 June 1999 witnessed a shrank by 30 per cent to RM200 billion from significant strengthening of the stockmarket. The KLSE RM286 billion during the same period. Average daily Composite Index (KLSE CI) closed above the 800-point volume during the two months dwindled to 123 million level on 24 June 1999 for the first time in twenty units. This was in line with the state of the local months. The last time it traded above this level was in economy, and the weakness of regional markets. October 1997. At the close of the financial year ended The ringgit remained weak a year after the flotation of 30 June 1999, the KLSE CI had gained 355.46 points the Thai baht. Investors’ concerns that the weak ringgit or 78 per cent at 811.10, compared to 455.64 on would cause companies’ earnings to fall, as well as 30 June 1998. During the same period, total market some companies not being able to service their loans capitalisation increased by 86 per cent to RM532 billion due to high interest rates, became a reality. Sentiment from RM286 billion a year ago. Total volume likewise weakened as the performance of financial institutions increased to 72 billion units compared to 67 billion and corporations worsened, with some even seeking units in the previous year, although total transacted protection against creditors under Section 176 of the value decreased to RM136 billion from RM254 billion Companies Act. a year ago. Confidence was also shaken by ratings’ downgrade by Stabilisation measures continued to be implemented foreign agencies. Standard & Poor’s lowered Malaysia’s by the Government and its agencies to restore sovereign rating to a negative outlook, and downgraded investor and consumer confidence, as well as to Malaysia’s long-term foreign and local currency ratings. revive the economy. Moody’s Investors Service similarly lowered Malaysia’s long-term and short-term currency country ceilings for The first two months of the financial year saw the KLSE debts. The market was also affected by instability in CI fall by 152.73 points or 34 per cent to 302.91 regional currencies. The weakening of the Japanese at the close of 28 August 1998, from 455.64 at the yen led to fears of a Chinese renminbi devaluation, close of 30 June 1998. Total market capitalisation while the Hong Kong dollar came under speculative
18 Annual Report 1999
attack, forcing the Hong Kong government to increase capitalisation shrank on the same day to RM181 the interbank rate to defend the currency. This led to billion from RM200 billion the previous day. However, the fall in the Hang Seng Index. Even the devaluation after having absorbed the news fully, the market made of the Russian rouble unnerved the local market. a turnaround on the following day and almost recovered Wall Street was not spared either, suffering its second the previous day’s loss by gaining 31.89 points. largest single-day point loss in history of 512.61 points on 31 August 1998 amid worries over the global On 4 September 1998, the Stock Exchange of Singapore economic situation. announced that trading of Malaysian securities on the Central Limit Order Book (CLOB) would be discontinued. To strengthen the economy and improve the investment Trading ceased permanently on 16 September 1998. environment, stabilisation measures were undertaken by the Government and its agencies. Among these By 7 September 1998, the KLSE CI had gained 182.36 were the formation of special purpose vehicles, points or 69 per cent from its low on 1 September namely, Pengurusan Danaharta Nasional Berhad and 1998 to close at 445.06. The rise, however, did not Danamodal Nasional Berhad, to strengthen the sustain for long and for the remaining period of banking system. The Corporate Debt Restructuring September, and the first half of October, trading was Committee was also established to aid in loan range-bound between 360.10–393.25. The expectations restructuring of the corporate sector. The National of an expansionary budget and the U.S. Federal Economic Action Council (NEAC), in July 1998, Reserve’s decision to cut its key interest rates by released the National Economic Recovery Plan (NERP) 25 basis points were among factors that helped to which outlined the comprehensive framework for lift market sentiment in the latter half of October. national economic recovery. To complement these The KLSE CI closed at 405.33 on 30 October 1998. measures, Bank Negara Malaysia (BNM) eased the three-month intervention rate three times in August, In November, the KLSE CI eventually crossed the from 11.00 per cent to 9.50 per cent, and raised the 500-point level to close at 501.47 on 30 November hire-purchase financing ceiling to 85 per cent. 1998. During the month, the Securities Commission (SC) announced the extension of the warrants period To enhance transparency and make Malaysia the to a maximum of ten (10) years, followed by the premier market for the trading of Malaysian securities, new guidelines for fund management. Sentiment was measures were introduced by the KLSE on 31 August buoyed by better economic data which showed the 1998. With immediate effect, all dealings in securities trade balance recording a surplus for the eleventh listed on KLSE must be effected through KLSE or a consecutive month in September 1998, while foreign recognised exchange. reserves rose to RM89.3 billion as at end October 1998 from RM81.5 billion as at end September 1998. On 1 September 1998, the Government announced its BNM announced another reduction in the three-month decision to insulate the Malaysian economy from intervention rate from 7.50 per cent to 7.00 per cent. external forces by imposing selective exchange controls on foreign exchange transactions. The three Market sentiment continued to improve and steady major controls were international non-convertibility of gains in the KLSE CI throughout the month of December the ringgit, pegging of the ringgit to the US dollar resulted in the Index ending the year at 586.13. Within (RM3.80 to US$1), and one-year holding rule for four months since the selective exchange controls were portfolio capital. imposed, the KLSE CI had gained 323.43 points or 123 per cent, and total market capitalisation had increased The initial reaction to the selective exchange controls by RM194 billion or 107 per cent to RM375 billion. resulted in the KLSE CI falling by 40.21 points or Average daily volume transacted during the month 13 per cent to 262.70. This was compounded by the increased to 372 million units (RM705 million) from 512.61-point overnight plunge on Wall Street. Market 330 million units (RM515 million) in November.
19 Kuala Lumpur Stock Exchange
Market Report 1 July 1998 to 30 June 1999
By 21 January 1999, the KLSE CI had crossed the 600-point level to close at 614.52. Trading activity, however, slowed to an average daily volume of 207 million units (RM455 million). Several measures were implemented during the month. The new Take- Overs & Mergers Code and the Capital Adequacy Requirements for stockbroking companies were introduced. The latter will replace the Minimum Liquid Funds requirement for stockbroking companies. This was followed by BNM allowing repatriation of contra-trade profits by foreigners and allowing stockbroking companies to provide margin financing for non-residents.
stimulate the economy. Share prices also rose as a In the following month of February, the market result of improved liquidity in the banking system, turned quiet on lack of buying support ahead of the and on BNM’s decision to reduce the three-month Chinese New Year holidays. An average daily volume of intervention rate from 7.00 per cent to 6.50 per cent 140 million units (RM330 million) was recorded. on 5 April 1999 followed by a further reduction The KLSE CI traded within the range of 526.10 – to 6.00 per cent with effect from 3 May 1999. 579.55 during the month. Measures continued to be The positive regional outlook was also a driving implemented to strengthen confidence. On 4 February force that pushed the Index past the 700-level in 1999, BNM announced a graduated exit levy for May. Volume recorded a high of 1,142 million units portfolio investments, to be implemented on 15 February on 19 May 1999. 1999, to replace the existing selective exchange controls.
Investors’ confidence in the prospects of the economy, Investors remained sidelined in the face of uncertainty over the possibility of poor corporate results and in the spurred by an improvement in economic figures, absence of fresh leads. Consequently, the average daily further strengthened market sentiment in the following volume in March was further reduced to only month of June. The last two weeks of the financial year 80 million units (RM169 million) while the KLSE CI saw heavy trading, with volume averaging approximately traded within a tight range of 494.97 – 531.54. 727 million units daily. The KLSE CI moved above the 800-point level to close at 811.10 at the end of the Confidence returned to the market in the second quarter financial year. Retailers took the cue from institutional of 1999 on the back of ratings upgrade and an buying to enter the market. The SC’s decision to allow improved economic environment. In the month of April, the issuance and listing of new warrants to replace Standard & Poor’s raised its outlook for Malaysia’s debt existing warrants created further retail buying interest, ratings from negative to stable. Malaysia’s improved particularly in warrants and loan stocks. While talk of standing was acknowledged with Moody’s also revising an early election helped to lift market sentiment, its outlook for Malaysia’s long-term foreign currency investors were also mindful of the direction of interest country ceilings from negative to stable. Subsequently, rates in the United States. Fitch IBCA restored Malaysia to investment grade, from BB to BBB-. Morgan Stanley Capital International (MSCI) During the period under review, 17 new companies indicated that Malaysia is likely to be readmitted in the were listed, raising RM474 million. Of the 17 new MSCI indices in February 2000. companies, 3 were listed on the Main Board. As at the end of the financial year, the total number of The success of the issuance of the US$1 billion companies listed on the KLSE was 745, with 458 sovereign bonds by the Malaysian Government in companies listed on the Main Board and the remaining May raised hopes of the availability of funds to 287 on the Second Board.
20 Annual Report 1999 Issues In Focus
The roles and responsibilities within KLSE are assigned as follows:-
Y2K Steering Committee – The Y2K Steering Committee is chaired by the Deputy Chairman of KLSE and is composed of KLSE Committee Members, directors of subsidiary companies and senior management of the KLSE Group. The Y2K Steering Committee provides strategic and tactical guidance to the Information Technology Task Force (Y2K) and the Listing Disclosures Management Team. The Y2K Steering Committee meets regularly to review the progress and issues in relation to Y2K compliance.
Information Technology Task Force (Y2K) – The Information Technology Task Force (Y2K) was formed in early 1998 and is headed by the Senior Vice Year 2000 Compliance President, Facilities Management Division of KLSE. Its main objectives are as follows:- The KLSE Group has undertaken an industry-wide • To ensure that all KLSE Group computer systems effort to address the Year 2000 problem to ensure that and supporting facilities comply with and are all critical systems continue to operate reliably before, tested to be Y2K compliant. on and after the Year 2000. The aim is to minimise the • To co-ordinate Y2K compliance by:- impact to the Malaysian capital market during the – Stockbroking companies, which are Member roll-over to the new Millennium. Companies of KLSE, Clearing Members of SCANS and Authorised Depository Agents Roles and Responsibilities (ADAs) of MCD
The objective of the KLSE Group’s Year 2000 Project is – Authorised Direct Members (ADMs) of MCD to promote awareness of the Year 2000 issue, to conduct remediation programmes and to provide The Information Technology Task Force (Y2K) is appropriate levels of support to stockbroking accessible as a Year 2000 knowledge and resource companies to ensure that there are no trading centre to provide compliance effort support to individual disruptions when the Year 2000 arrives. businesses and system areas within the KLSE Group.
21 Kuala Lumpur Stock Exchange
Issues In Focus
Listing Disclosures Management Team – The team has KLSE Group – Y2K Status been assigned to co-ordinate disclosures of all public KLSE Group Mission Critical Systems listed companies in relation to their efforts in resolving Y2K related issues. The team is headed by the Senior Mission critical systems are systems that are used Vice President, Listing Operations, Listing Group of KLSE. by the KLSE Group to run its core businesses. All mission critical systems, as listed below, have been successfully tested and confirmed Y2K ready:- Y2K Standards • System on Computerised Order Routing & Execution KLSE has adopted the Year 2000 Conformity (SCORE) – Trading system which provides order Requirement Standards (DISC PD2000-1) as defined by routing and matching of all trades for KLSE. the British Standards Institution (BSI) as the Y2K standard for all computer systems. • Maklumat Saham (MASA) – KLSE’s real-time price dissemination system, which broadcasts real-time market information to stockbroking companies and Y2K Testing information vendors. In ensuring Y2K compliance, great emphasis has been • Broker Front-end Trading System (WinSCORE) – placed on testing, which comprises Unit Tests, Front-end trading system that provides risk Integration Tests and End-to-End Industry-Wide Tests. management, order entry and trade confirmation facilities for KLSE stockbroking companies. Y2K End-to-End Industry-Wide Tests – The purpose of • Fixed Delivery & Settlement System (FDSS) – these tests is to allow participants to perform integrated Clearing and settlement system that settles all testing of their systems with the KLSE Group’s systems. trades done at KLSE.
Four Y2K End-to-End Industry-Wide Tests have been • Central Depository System (CDS) – Electronic scrip completed. All testings involved participation from custody and book entry system to keep track of the various organisations, including:- movement of shares. • KLSE Group • Surveillance Information System (SIS) – On-line • Stockbroking companies surveillance system for monitoring market activities. • Authorised Direct Members (ADMs) • Information vendors • Public listed companies
22 Annual Report 1999
External User Systems
External user systems are systems used by the KLSE Group that interface with external users or which are directly accessible by the public. There are 15 systems which fall under this category, all of which have been tested and confirmed Y2K ready.
Internal User Systems
All internal user systems actively used by the KLSE Group are Y2K ready.
Mission Critical IT Infrastructures
KLSE’s network, which includes both the data Public Listed Companies – Y2K Status communication hardware and software, have been Based on the disclosures received up to October 1999, tested and confirmed Y2K compliant. Likewise all the state of readiness of Public Listed Companies KLSE’s data centre infrastructures including security, is as follows:- environmental, electrical and fire-fighting systems have also been tested and confirmed to be Y2K ready. Public Listed Companies’ Y2K Main Board Second Board Compliance Status Although all KLSE’s systems and IT infrastructures have October 1999 412 89.18% 266 93.66% been declared Y2K ready, continuity of KLSE’s services in the new Millennium depend highly on the Y2K November 1999 440 95.24% 277 97.53% compliance status of the external services on which it December 1999 462 100% 284 100% relies, such as telecommunication carriers and Note:- For the 746 public listed companies comprising 462 Main national power supply providers. Nevertheless, the Board companies and 284 Second Board companies, full compliance is expected by December 1999. necessary steps have been taken to minimise the impact if any of these external services are disrupted due to Y2K non-compliance. This is addressed in Independent Auditor Status Review KLSE’s contingency plans. KLSE Group has also taken the initiative to appoint an external independent auditor, PricewaterhouseCoopers, Stockbroking Companies – Y2K Status to specifically review and ensure that all processes and activities carried out by the KLSE Group address As at October 1999, 61 active stockbroking companies the Y2K problem properly and comprehensively. have confirmed Y2K readiness. Two (2) remaining The independent auditor has completed the review stockbroking companies are not compliant and have from early January 1999 to mid February 1999, been suspended from trading. through interviews with the KLSE Group staff. They have also examined statements, inventories, responses from suppliers to inquiries made by KLSE, task schedules and resource plans. The scope of work focused on the mission critical systems and was also extended to include a general review of the Year 2000 project.
23 Kuala Lumpur Stock Exchange
Issues In Focus
Similarly, the stockbroking companies have also been Capital Adequacy Requirements requested to engage independent auditors to review their status. Copies of the status review reports are As part of KLSE’s continuing efforts in enhancing required to be extended to KLSE. investor protection and ensuring an orderly and fair market for securities transactions, the financial year The National Y2K Committee headed by the Ministry 1998/1999 has seen the emergence of KLSE’s Capital of Energy, Communications and Multimedia has also Adequacy Requirements (CAR). The capital adequacy conducted a review to verify the Y2K status of the regulatory framework encourages stockbroking KLSE Group in June 1999. The National Y2K companies as market intermediaries to adopt a more Committee has indicated that they are satisfied with relevant approach to risk management and to assess KLSE’s Y2K readiness. the risk of their operations on a daily basis.
Contingency Plans The focus of KLSE’s CAR is in ensuring that the liquid capital of a stockbroking company is at all times Despite comprehensive preparation to ensure Y2K adequate to cover total measured risks. The imposition compliance, the KLSE Group has in place detailed of these capital adequacy standards will provide contingency plans. Similarly, the Exchange has also stockbroking companies with an effective tool to better made it mandatory for stockbroking companies to manage their risks and will not hamper the reasonable develop contingency plans to ensure minimum expansion of stockbroking companies. disruption during the roll-over to the new Millennium. The KLSE Group has also declared 31 December 1999 The CAR rules were approved by the Securities a non-trading and non-settlement day. Commission (SC) on 31 December 1998. The first stage of implementation involved the issuance and dissemination, on 28 May 1999, of the rules to the stockbroking industry. The second stage of implementation will be the complete shift to the CAR regime and replacement of the existing concept of Minimum Liquid Funds. In its development as a front-line regulatory organisation, KLSE is committed to complete the second stage of implementation of the CAR in the financial year 1999/2000.
24 Annual Report 1999
One major milestone has been the commissioning of the KLSE Risk Management System (KLSE RMS) in July Revamp of Listing Requirements 1998 at KLSE and the stockbroking companies. The revamped Listing Requirements have been formulated The applications within the KLSE RMS provide and submitted to the Securities Commission (SC) for stockbroking companies with a means to monitor and approval under Section 9 of the Securities Industry Act calculate on a daily basis the inherent risks of the 1983. This is the first revamp undertaken by the KLSE business, identified as operational risk, position risk, since the introduction of the present rules in 1987. counterparty risk, large exposure risk and underwriting risk, and the required amounts of capital to meet those The objectives of the revamp include the following:- risks. The KLSE RMS operates through a pre-defined interface with the stockbroking company’s back-office • To strengthen the provisions in areas of concern, to capture a daily image of the back-office data, namely, disclosure, financial reporting, continuing which is then stored for risk computation. listing obligations and corporate governance; • To benchmark against rules of developed markets; Compliance with CAR is monitored through the daily • To rationalise the provisions of the Listing transmission of the CAR report, which displays the Requirements with existing laws, in particular the stockbroking company’s aggregate risks, associated Securities Industry Act 1983 and the Companies capital requirements and its liquid capital. Any material Act 1965; fluctuations or irreconcilable positions can be further • To codify unwritten rules, procedures and regulations verified by remote interrogation of the KLSE RMS of the KLSE relating to listed companies; and application at the reporting stockbroking company. • To remove all ambiguities and plug loopholes, if any, The coming into effect on 1 July 1999 of the KLSE’s in the provisions. new guidelines on Suspension of Interest and Provision for Bad and Doubtful Debts has standardised interest The main aim of the KLSE is to produce a income recognition and provisioning for bad and comprehensive and easily comprehensible rule book doubtful debts across the stockbroking industry. that adequately governs both the companies listed on This complements the CAR, in that, the standardisation the Main Board and the Second Board. In that regard, of the treatment of bad and doubtful debts will result the Main Board Listing Requirements and the Second in the financial reports of the stockbroking companies Board Listing Requirements have been merged into being more reflective of their true financial position. one single rule book. Existing guidelines were also reviewed and incorporated into the revamped Listing The CAR is a dynamic tool and is constantly being Requirements. The KLSE also took into account the refined and upgraded to keep abreast with changes in need to provide the rules in a clear, succinct and the Malaysian capital market and developments in easily comprehensible manner. Accordingly, in international exchanges. addition to emphasis on the substance of the rules,
25 Kuala Lumpur Stock Exchange
Issues In Focus
equal emphasis has also been given to the format of To provide guidance and assist market participants in the Requirements so as to produce a rule book that complying with the revamped Listing Requirements, will facilitate easy understanding and application. the KLSE will also issue Practice Notes on pertinent areas. These Practice Notes will provide an explanation The enhancement of standards of corporate governance and clarification to the provisions of the revamped and transparency amongst public listed companies Listing Requirements to minimise ambiguity in the underpins some of the proposed new requirements. interpretation and increase clarity, thus achieving In this regard, the recommendations of the Finance consistent application of the same. Committee on Corporate Governance in relation to the Listing Requirements made in its report dated February Prior to the implementation of the revamped Listing 1999 have also been adopted. Requirements, the KLSE will ensure that sufficient opportunity is given to the relevant market participants The revamp exercise was carried out in consultation to understand and familiarise themselves with the with the industry. The KLSE also held informal revamped requirements. discussions with selected industry participants as well as industry professionals to obtain their view points on The KLSE is relentless in its efforts to promote the specific issues arising from the revised provisions of exchange as a premier market with adequate investor the Listing Requirements. The extensive consultation protection rules. It is believed that the implementation of process is to ensure that any new rule proposed to be the revamped Listing Requirements will positively introduced will continue to promote business efficacy contribute towards efforts in making KLSE a more and achieve the intended objectives. attractive market for capital raising and investment.
26 Annual Report 1999
programmes. Also, in collaboration with the Malaysian Informed Investing Accounting Standards Board (MASB), briefings/seminar sessions on the “Technical and Practical Overview of One of the objectives of KLSE is to promote the orderly MASB Standards” have been organised throughout the conduct and expansion of the stockmarket. Investor country to educate all relevant parties on these education plays an important role towards this end as standards which became effective 1 July 1999. an informed investing public is essential to the growth and well-being of the capital market. A well-informed The establishment of Balai Maklumat BSKL (KLSE investing public would base its investment decisions Information Centres) in Penang, Johor Bahru and more on fundamentals rather than rumours, perception Kuching, as well as the Public Information Centre or sentiment, and tend to invest for the longer term, at Exchange Square in Kuala Lumpur, also assist in thereby contributing to the stability of the market. promoting informed investing as complete information is made available to all investors. To date, the facilities Investor education is also an important tool in the and services offered in these centres have been well enhancement of the level of disclosure and received by the public, especially information on listed transparency in the Malaysian securities market. companies, market analysis and trading information of A higher degree of transparency, complemented listed companies. We expect the public response to by greater professionalism among market participants, increase further with the expansion of training would contribute towards the success of a disclosure- programmes and courses related to the securities based market. industry to be held at the centres. The network of Balai Maklumat BSKL will be expanded to other cities. Recognising the importance of investor education, various efforts have been and will continue to be Securities industry information is also available undertaken by the KLSE Group to meet the diverse electronically. KLSE’s web-site (www.klse.com.my) information and training needs of existing and provides comprehensive information on the Exchange potential market participants. and the Malaysian securities industry. The KLSE web-site underwent major structural and design Among others, the Research Institute of Investment changes in February 1999 to further improve the Analysts Malaysia (RIIAM), the training arm of KLSE, offers a wide selection of public courses, ranging from basic to more in-depth subject matters. These include the Malaysian Securities Industry Introductory Course, Stockmarket Outlook Seminar and the RIIAM Diploma in Investment Analysis (a joint-venture effort between RIIAM and the Royal Melbourne Institute of Technology)
27 Kuala Lumpur Stock Exchange
Issues In Focus
timely dissemination of information and to provide Besides providing the above avenues and facilities visitors with a more user-friendly web-site. Based on a that are accessible to the public, KLSE personnel also survey carried out to obtain feedback from site visitors give briefing sessions to various groups of people as well as from research, the restructured web-site such as students, fund managers, government officials provides a more efficient categorisation of the main and directors of corporations. The types of briefings sections/topics. The web-site has also been commended vary depending on the type of visitors and the for having “good hyperlinks and very timely updates”. objectives of their visits. The usual topics covered are the workings of the KLSE Group, recent developments In addition to the KLSE web-site, the KLSE-RIIAM of the KLSE and of the Malaysian securities market. Information System, accessible through the internet The KLSE received a total of 4,500 visitors, for the at no cost (www.klse-ris.com.my), provides more period under review. detailed financial data and information through its three main modules, namely the KLSE-RIS Trader, However, we recognise that investor education is KLSE-RIS Pricing Package and KLSE-RIS Securities best developed in a proactive manner. Valuable lessons Analysis Package. can be learned from the exchange of ideas and views between the regulators and market participants. Another internet-based facility is the KLSE Listing Thus, dialogue sessions have been organised by Information Network (KLSE LINK) which was the KLSE with various groups, among others, the introduced on 8 October 1999. Accessible via the Malaysian Investors Association and the Malaysian KLSE’s web-site, KLSE LINK provides investors with Institute of Directors. These sessions, aimed at fostering timely and easy access to the corporate announcements a better and closer relationship with industry and other financial information submitted by the participants, are ongoing. These groups of industry public listed companies, free of charge. This facility participants can also act as strategic partners of the enhances investors’ ability to make well-considered KLSE in the effort to help educate investors. investment decisions. In addition to these sessions, the KLSE also reaches out to the public in the market place through the organisation and/or participation in roadshows or seminars.
For example, KLSE sponsored and participated in roadshows/seminars organised by the Bumiputera Remisiers Association (Pribumi) held in various locations such as Kuala Lumpur, Penang, Johor Bahru and Kuching. KLSE also jointly organised, with the Asian Strategy and Leadership Institute, The National Securities Industry Summit. In addition, KLSE was the main sponsor of the International Conference on Malaysia’s Capital Market Investment (ICOMVEST) 1999 jointly organised by Universiti Teknologi Malaysia Skudai and the Association of Remisiers Malaysia. A KLSE information booth was also set up at the ICOMVEST 1999 to promote the KLSE and the courses offered by RIIAM.
28 Annual Report 1999
On the international front, briefing sessions were also held for the officers of Wisma Putra as they play an Challenges for the Stockmarket important role in the promotion of the Malaysian The new Millennium sees the dawn of new challenges securities market abroad. The opportunity was also for stockmarkets. Challenges here stem from a variety taken during overseas visits to brief officials at of issues that would have significant impact on the Malaysian diplomatic missions and the Malaysian facade of the global securities industry. The KLSE for its business community abroad on KLSE measures and part must comprehend these changes and challenges new initiatives. In addition, KLSE also participated in order to survive and to excel in an increasingly in investment related conferences and business council competitive securities industry environment. Here, we meetings overseas. look at a number of priority issues that loom over KLSE as its major challenges. Last but not least, the various KLSE publications such as the Daily Diary, Investors’ Digest, KLSE Statistics and the Annual Companies Handbook, complement Information Technology the above investor education efforts. Additional Advances in information technology have led to publications and enhancement of existing publications, significant changes in securities markets. A major to be more tailored to the diverse needs of current and impact has seen the lowering of entry barriers towards potential market participants, are in the pipeline in establishing new exchanges. This has led to the order to further promote the KLSE. widespread emergence of alternative and proprietary trading systems that are executing trades outside Thus, various efforts have been directed towards traditional exchanges between large participants at low investor education. In line with KLSE’s stance of cost and competitive speed. This technology which has obtaining feedback for further improvement, a facilitated easier market access by these new electronic Malaysian Securities Industry Survey will be conducted networks or exchanges, now threatens the business on existing investors. One of the objectives of the and even the existence of a number of exchanges. survey is to gauge investors’ knowledge level of the local securities industry in order to improve and develop the information currently provided by KLSE.
As we embrace disclosure-based regulation, KLSE, as a front-line regulator, would have to assume a larger role in instilling greater awareness among investors on the importance of fundamentals in making their investment decisions, at the same time strengthening our capital market.
29 Kuala Lumpur Stock Exchange
Issues In Focus
Internet Economic Liberalisation
The growth of the internet in the commercial sector Many governments and their securities authorities are has significantly impacted on the fascia of markets and undertaking or considering broad-based deregulation further accelerated developments in the securities of their securities industries resulting in the reduction industry. In fact, the impact of the internet can be seen of regulatory protection granted to national markets as three-fold, as it has allowed intermediaries and and participants to enhance competition and efficiency exchanges to have wider access to investors globally, of their economies and markets. The aim is to increase minus the physical barriers that previously existed. and attract international participation as it is perceived that these markets are more competitive and efficient. Firstly, on-line internet brokerages now threaten the International participation also brings in a larger and business of conventional brokerages by offering more diverse investor base, enabling not only transfer reduced rates for transactions and providing wider of knowledge and skills but also fast injection of funds access to investors. Secondly, there is the prospect of to further develop the economy. However, efforts disintermediation in the securities industry, as a towards this end will be undertaken in gradual stages number of exchanges will be or will consider and, in consultation with market participants, to ensure introducing new trading systems allowing investors to that the industry is ready to face the new set of trade directly on the bourse instead of going through challenges posed by economic liberalisation. brokers. And finally, exchanges also face the challenging prospect of issuers raising capital directly Investors’ Markets from the public without going through the exchange. The phenomenal growth of investor participation in the securities markets has led to increased investor activism in the markets that they participate in, especially in relation to institutional investors who seek global diversification and efficient methods of trade execution. Their search for alternative and cost effective ways of trading has led to fierce competition among existing exchanges and has encouraged the growth of alternative and proprietary trading systems.
The search by investors for better value is also resulting in increasing disintermediation of brokers in the trading process and is leading to demands from investors for:- • Direct access to stock exchanges, and • Representation in the governance of the markets.
In summary, the balance of power in the markets appears to be shifting from intermediaries to investors.
30 Annual Report 1999
Cross-Border Trading and Listing Global Competition
The ability of issuers and investors to migrate from one Markets have begun to embark on the creation of market to another basically poses a huge threat to larger markets through consolidation, mergers or markets that fail to respond to their needs. In facing alliances. The outcome of these initiatives could be the competition offered by more developed and bigger creation of regional and inter-linked markets offering exchanges, small and large markets have begun 24-hour access to worldwide participants. This is a pooling their resources to further promote their primary example of the impact of globalisation and markets. For example, merger of exchanges is one liberalisation in financial markets, boosted by method to strengthen the resources of exchanges, technological developments and spurring the creation indifferent to the size and location of the markets. of a financial world without boundaries. The removal Another method is through the establishment of of physical and legal barriers accentuates the influence alliances between markets, the objective being to of the financial sector on the policies of nations. widen the investor base and investor participation, which indirectly attracts intermediaries and issuers. Conclusion
The challenges faced by KLSE in the next Millennium Regional Competition are basically all about competition, especially Asia-Pacific exchanges have notably embarked on competition between KLSE and other market institutions. a number of initiatives to raise their competitiveness The ability of KLSE to handle all these challenges not only in terms of operations, but also in attracting efficiently would certainly reflect on the competitiveness market participants to their exchanges. Methods and attractiveness of KLSE as an internationally used include reduction of operating costs, widening recognised market for the mobilisation of capital. access, ensuring operational efficiency, and utilising current technology. KLSE will continue to monitor the challenges facing the securities industry and will engage all participants in formulating a plan of action to ensure its continued development.
31 Kuala Lumpur Stock Exchange Committee Members
Left to right:
Abdul Kadir Hj Md Kassim
Dato’ Hwang Sing Lue
Tan Kim Leong, JP
Dato’ Ranita Mohd Hussein
Dato’ Mohammed Azlan Hashim Executive Chairman
Mohaiyani Shamsudin
Chan Guan Seng Deputy Chairman
Benny Ng Wu Hong
Koh Kee Tee
DATO’ MOHAMMED AZLAN HASHIM KOH KEE TEE Executive Chairman • Admitted to Membership of the Exchange: 30.6.1973; • Bachelor of Economics (Accounting) • Appointed as Corporate Nominee: 5.10.1995; (Monash University, Australia); • Elected to the Committee: 20.12.1980 – 13.12.1986; • Member of Malaysian Institute of Accountants; 19.12.1987 – 19.12.1992; 18.12.1994 – 18.12.1996; • Member of Institute of Chartered Accountants, 26.11.1997 – present.* Australia; • Government appointed Committee Member: 18.12.1996 – 31.12.1997; • Government appointed Executive Chairman: 1.1.1998. BENNY NG WU HONG
• Bachelor of Commerce (Deakin University, Australia); CHAN GUAN SENG • Appointed as Corporate Nominee: 3.1.1995; Deputy Chairman • Elected to the Committee: 5.12.1996 – 28.11.1998; 1.1.1999 – present.* • Bachelor of Commerce (Hons.) (University of Melbourne, Australia); • Member of Australian Society of Accountants; MOHAIYANI SHAMSUDIN • Member of Institute of Chartered Accountants, Australia; • Master of Business Administration (Finance) • Admitted to Membership of the Exchange: 7.3.1984; (Cornell University, New York); • Appointed Corporate Nominee: 1.6.1991; • Bachelor of Arts (Economics) (Knox College, Illinois); • Elected to the Committee: 13.12.1986 – 18.12.1988; • Admitted to Membership of the Exchange: 8.8.1985; 6.12.1989 – 18.12.1994; • Elected to the Committee: 28.11.1998 – present.* • Elected to the Committee and as Deputy Chairman: 5.12.1996 – present.*
32 Annual Report 1999
DATO’ HWANG SING LUE DATO’ RANITA MOHD HUSSEIN
• Director of Malaysian Exchange of Securities • Bachelor of Laws (Hons.) (University of Singapore); Dealing & Automated Quotation Bhd (MESDAQ); • Advocate & Solicitor, Malaysia and Brunei; • Admitted to Membership of the Exchange: 30.6.1973; • Member, Panel of Arbitrators, The Kuala Lumpur • Appointed as Corporate Nominee: 1.12.1992; Options and Financial Futures Exchange Bhd; • Elected to the Committee: 10.12.1977 – 8.12.1982; • Government appointed Committee Member: 14.12.1991 – 26.11.1997; 28.11.1998 – present.* 18.12.1996 – present.
TAN KIM LEONG ABDUL KADIR HAJI MD KASSIM
• Member of Malaysian Institute of Accountants; • Bachelor of Laws (Hons.) (University of Singapore); • Fellow of Institute of Chartered Accountants, Australia; • Government appointed Committee Member: • Member of Malaysian Association of Certified 1.3.1998 – present. Public Accountants; • Fellow of Malaysian Association of the Institute of Chartered Secretaries & Administrators; * Redesignated as Dealing Members of the Exchange • Government appointed Committee Member: effective 1 July 1999 under the Exchange’s new Rules. 18.12.1996 – present.
33 Kuala Lumpur Stock Exchange Management Team
Left to right:
Md Nor Ahmad Deputy President
Dato’ Mohd Salleh Abdul Majid President
Ungku A Razak Ungku A Rahman Deputy President
Left to right:
Izlan Izhab Executive Vice President, Corporate & Legal Affairs
Ku Abdul Rahman Ku Sulaiman Senior Vice President, Market Infrastructure
Devanesan Evanson Senior Vice President, Compliance & Inspection, Market Supervision Group
Left to right:
Tan Chun Weng Senior Vice President, Financial Review & Surveillance, Listing Group
Lew Lup Seong Senior Vice President, Finance & Administration
Latifah Hj Mohd Yusof Senior Vice President, Listing Operations, Listing Group
34 Annual Report 1999
Left to right:
Abdul Razak Mohd Amin Senior Vice President, Group Human Resource
Qua Gek Kim Senior Vice President, Public Information
Abdul Hamid Sh Mohamed Senior Vice President, Policy & Development
Left to right:
Wong Kay Yong Vice President, Surveillance & Investigation, Market Supervision Group
Chuah Mei Lin Legal Advisor, Market Supervision Group
Alice Thomas Senior Manager, Group Communications
Left to right:
Selvarany Rasiah Legal Advisor, Listing Group
Ch'ng Boon Huat Vice President, Financial Review & Surveillance, Listing Group
35 Kuala Lumpur Stock Exchange
Left to right:
Tai Yoke Peng Vice President, Organisation & Methods, Market Infrastructure
John Duggan Group Advisor, Derivatives Markets
Yew Kim Keong Senior Vice President, Facilities Management
Left to right:
Mohamad Azam Ali Senior Manager, Public Affairs, Executive Chairman’s Office
Johan Abdullah Vice President, Listing Operations, Listing Group
Chee Yaw Soon Senior Manager, Trading Services, Listing Group
Left to right:
Shukoriah Mohd Noor Senior Manager, Public Information
Winnie Choong Senior Manager, Public Information
Zulkifli Harun Senior Vice President, Information Services/Information Technology
36 Annual Report 1999
Left to right:
Abdul Raihan Mohd Yusof Senior Manager, Secretarial Affairs, Corporate & Legal Affairs
Low Pheng Senior Manager, Group Internal Audit
Left to right:
Haji Hayata Elias Manager, Security
Ayub Mohamed Senior Manager, Corporate & Legal Affairs
Lee Choy Senior Manager, Administration
37 Subsidiary Related& Companies Annual Report 1999
KLSE Group Of Companies
KLSE-Bernama Real-Time Information Services Sdn Bhd (KULBER) Securities Clearing Automated Network Services Sdn Bhd (SCANS) Malaysian Share Registration Services Sdn Bhd (MSRS) Malaysian Central Depository Sdn Bhd (MCD)
MCD Nominees Sdn Bhd The Kuala Lumpur Options & Financial Futures Exchange Bhd (KLOFFE)
Kuala Lumpur Stock Exchange (KLSE) Research Institute of Investment Analysts Malaysia (RIIAM)
Yayasan BSKL
39 Kuala Lumpur Stock Exchange Group Directors And Governors
Left to right:
Chan Guan Seng (KLSE/SCANS/MCD/RIIAM)
Dato’ Mohammed Azlan Hashim (KLSE/SCANS/MCD/KULBER/MSRS/KLOFFE/RIIAM)
Dato’ Ranita Mohd Hussein (KLSE/SCANS/KLOFFE/RIIAM)
Benny Ng Wu Hong (KLSE/SCANS/RIIAM)
Left to right:
Abdul Kadir Hj Md Kassim (KLSE/SCANS)
Datuk Amirsham A Aziz (MCD)
Koh Kee Tee (KLSE/SCANS)
Tan Kim Leong (KLSE/SCANS/MCD/RIIAM)
Left to right:
Ramli Ibrahim (KLOFFE)
Dato’ Seri Syed Zainol Anwar Jamalullail bin Tuanku Syed Putra Jamalullail (MCD)
Dato’ Mohd Salleh Abdul Majid (SCANS/KULBER/KLOFFE/RIIAM)
Dato’ Hj Megat Najmuddin Khas Dato’ Sri Dr Hj Megat Khas (SCANS/MSRS)
40 Annual Report 1999
Left to right:
Tan Sri Zulkifli Mahmood (MSRS)
Mohd Ridzal Mohd Sheriff (KLOFFE)
Omar Merican (KLOFFE)
Mohamad Shuib Abdul Ghani (MSRS)
Left to right:
Prof Datuk Abu Bakar Abdul Hamid (KULBER)
Datuk Teh Ghee Kok (KULBER)
Prof Tan Sri Dato’ Dr Syed Jalaluddin Syed Salim (RIIAM)
Shahzalan Adam (KULBER)
Left to right:
Syed Jamil Syed Jaafar (KULBER)
Mohamad Ariff Md Yusof (KLOFFE)
Mohaiyani Shamsudin (KLSE/SCANS)
Dato’ Hwang Sing Lue (KLSE/SCANS/KLOFFE)
Not in picture:
SA Vanar (KLOFFE)
41 Kuala Lumpur Stock Exchange
Securities Clearing Automated Network Services Sdn Bhd SCANS
Left to right:
Azman Shah Md Yaman Legal Advisor, Corporate Affairs, Legal & Compliance
Lim Boon Hang Senior Manager, Risk Management, Compliance & Surveillance
Lim Lean Beng Senior Manager, Clearing
Ungku A Razak Ungku A Rahman General Manager
Fathi Ridzuan Ahmad Fauzi Assistant General Manager, Finance & Administration
For the financial year ending June 1999, SCANS industry through the development of centralised, has achieved a net profit before tax and before standardised, post-trade automated processing extraordinary items of RM84 million. solutions that will increase efficiency, minimise settlement risk and reduce settlement costs. Activities/projects undertaken by SCANS for the year under review include: The review includes:- • Review of the Operations of SCANS as Malaysia’s – review and recommendations on the corporate National Clearing House structure and governance of SCANS An on-going review of the operations of SCANS as – proposal for appropriate model for guaranteeing Malaysia’s national clearing house was undertaken. of trade settlement The review was undertaken to enhance SCANS’ – review and recommendations on operational role in the securities industry as the central procedures and rules of SCANS clearing house, and thus, to realise its vision of – proposal on risk management procedures ensuring the soundness of the Malaysian securities
42 Annual Report 1999
– review and recommendations on insolvency laws that impact on the settlement operations of SCANS – proposal for the establishment of clearing guarantee fund – review and recommendations on interface procedures with the central depository and stock exchanges, and – proposal for appropriate model for automated securities lending facilities In order to realise the enhanced DVP environment for A concept paper for the overall review has been the institutional investors, SCANS opened its completed and adopted. clearing membership to eligible financial institutions to be Non-Trading Clearing Members (NTCMs) of SCANS. This will enable the NTCMs to • Institutional Settlement Service (ISS) directly report, clear and settle securities ISS is a service offered by SCANS to institutional transactions through SCANS, on behalf of their investors, aimed at achieving an enhanced institutional investors. Delivery Versus Payment (DVP) environment that is consistent with practices of other jurisdictions. Amendments to SCANS’ Rules were effected to allow the clearing membership to be extended to The main objectives of ISS are to reduce the NTCMs and ancillary provisions were introduced settlement risk of institutional investors and to to cater for the ISS. enable SCANS to make payment directly to the institutional investors’ settlement agents upon This project was successfully launched on delivery of securities on the settlement date. 15 July 1999.
• Direct Business Transactions (DBT) In line with the amendments made to the KLSE’s Rules on DBT, SCANS had consequentially made several amendments to its Rules to give effect to the clearing and settlement of DBT. The amendments came into effect on 1 September 1998.
43 Kuala Lumpur Stock Exchange
KLSE-Bernama Real-Time Information Services Sdn Bhd KULBER For the financial year ended June 1999, KULBER has achieved a net profit before tax and before extraordinary items of RM3.28 million, as compared to RM4.12 million achieved during the previous financial year showing a decrease in profits of RM0.84 million or 20.4%.
KULBER is currently pursuing a new business strategic plan to steer the company in providing better and enhanced financial and investment information services to the investors, locally and abroad.
Malaysian Share Registration Services Sdn Bhd MSRS
For the year under review, MSRS participated in various activities, which amongst others included attending to clients’ and shareholders’ queries, assisting clients in their restructuring exercises and also extending assistance to relevant regulatory authorities. MSRS also provided specific services as Special Registrar for mandatory take-over offers of companies.
As at 30 June 1999, there are 81 listed and non-listed companies which have appointed MSRS as their share registrar.
Abdul Nasir Ahmad Daud General Manager
44 Annual Report 1999
Malaysian Central Depository Sdn Bhd MCD
Left to right:
Ahmad Aznan Haji Nawawi Legal Advisor, Corporate Affairs, Legal & Compliance
Ungku A Razak Ungku A Rahman General Manager
Nadzirah Abdul Rashid Manager, Finance & Administration
Haji Zainuddin Alang Mamat Assistant General Manager, Depository
Ang Ting Kang Senior Manager, Information Technology
Amendments to the Securities Industry (Central Transparency in Securities Trading and Ownership Depositories) Act 1991 (SICDA) and to the Rules of 1. Beneficial owner/Authorised nominee – All MCD were made during the financial year of July securities accounts must be opened in the name 1998 to June 1999 with the objective of promoting of either the beneficial owner of the securities or transparency in trading and ownership of securities in an authorised nominee, and dealings in deposited the stock exchange, to attain full immobilisation of securities can only be effected by these parties. securities within the Central Depository System (CDS) The categories of persons recognised to act as and maintain KLSE as the premier market for trading in authorised nominees are defined in the Rules of MCD. Malaysian securities.
45 Kuala Lumpur Stock Exchange
2. One account one beneficial owner – An authorised nominee shall hold deposited securities for one beneficial owner in respect of each securities account and the full name of the beneficial owner must be furnished to MCD, unless exempted by order of the Minister of Finance (MOF).
Immobilisation of Securities
1. Mandatory deposits – All prescribed securities were required to be deposited with MCD on or Year In Review before 1 December 1998, failing which the During the period under review, the accumulated securities would be transferred to the MOF. shares in the system increased from 122.4 billion A person whose securities had been transferred to shares to 157.6 billion whilst the number of companies the MOF could appeal to the Securities that prescribed their securities to be deposited into the Commission (SC) by 1 June 1999, failing which CDS has increased from 734 to 746. the MOF can dispose the securities and deal with the proceeds of the disposal as if they were The mandatory deposit requirement resulted in the moneys paid to him pursuant to the law relating deposit of 26 billion additional shares before its to unclaimed moneys. In the case of securities deadline on 1 December 1998. prescribed into the CDS after 1 November 1998, the securities must be deposited into the CDS As at 30 June 1999, the percentage of securities within the prescribed period. immobilised into the CDS stood at 98.52 per cent whilst the total number of shares withdrawn by the depositors Certain classes of securities are exempted from up to termination of the withdrawal facility on mandatory deposit. 1 September 1998 was 222.0 million or 0.18 per cent of the total number of shares in the system. 2. Prohibition on withdrawals – Depositors shall not withdraw securities which have been deposited In the year in review, the CDS settled a total number with MCD except when it is to facilitate share of 65.2 billion shares traded on the KLSE and buy back, conversion of debt securities, company facilitated more than 1.1 million CDS ordinary restructuring process, for rectification of error and transfers involving 99.8 billion shares. in any other circumstances determined by MCD. The number of CDS accounts opened during the year KLSE as the Premier Market was 521,421 bringing the total number of CDS
To achieve this objective and further to the amendments accounts opened as at 30 June 1999 to 2,447,866. to the SICDA, the rules were also amended to the effect that ordinary transfers are allowed only if the reason for During this period, MCD appointed two new the transfer is an approved reason and further effective stockbroking companies as its Authorised Depository from 8 September 1998, the express transfer facility has Agents (ADAs) bringing the total number of ADAs to 66, been suspended for an indefinite period of time. in addition to the 48 Authorised Direct Members (ADMs).
46 Annual Report 1999
MCD CALL-DIRECT
IN ITS EFFORTS TO PROVIDE A MORE USER-
FRIENDLY SERVICE, MCD LAUNCHED AN
INTERACTIVE VOICE RESPONSE SYSTEM CALLED
MCD CALL-DIRECT ON 22 OCTOBER 1999.
MCD CALL-DIRECT ENABLES THE CENTRAL
DEPOSITORY SYSTEM (CDS) ACCOUNT
HOLDERS AMONGST OTHERS, TO OBTAIN THE
BALANCES OF THEIR CDS ACCOUNTS VIA THE
MCD was appointed as the Central Depository for the TELEPHONE. ACCOUNT HOLDERS CAN ALSO Malaysian Exchange of Securities Dealing and REQUEST FOR A FAXED COPY OF THEIR Automated Quotation (MESDAQ) on 6 October 1997. The first MESDAQ listed counter was prescribed into STATEMENT OF ACCOUNT IF THE CALL IS the CDS on 22 March 1999. PLACED THROUGH A PHONE/FAX MACHINE.
Currently, MCD provides services to 69 share IN ADDITION, GENERAL INFORMATION ON registrars who represent 746 public listed companies in the CDS. During the period in review, a total of OTHER SERVICES OFFERED BY MCD IS ALSO 13,120 Record of Depositors (ROD) detailing investor AVAILABLE TO MCD CALL-DIRECT USERS. holdings in prescribed companies were produced upon issuers’ request. THIS FACILITY IS THUS, NOT ONLY FOR CDS
ACCOUNT HOLDERS BUT ALSO FOR THE Between June 1998 and August 1998, MCD together GENERAL PUBLIC NVESTORS WILL ALSO BE with the rest of the KLSE Group completed two . I Y2K Integration Tests. In October 1998 and April 1999, LINKED TO MCD’S HELPDESK SHOULD THERE the CDS also passed the first and second Y2K BE ANY ENQUIRIES ON MCD CALL-DIRECT. End-to-End Industry Wide Tests. All the ADAs and ADMs participated in this exercise.
47 Kuala Lumpur Stock Exchange
The Kuala Lumpur Options & Financial Futures Exchange Bhd KLOFFE
Left to right:
S Loganathan General Manager
Mohd Shah Shariff Senior Manager, Information Technology
Janita Cheah Senior Manager, Business Development
Linda Song Company Secretary/Manager, Legal
The Kuala Lumpur Options and Financial Futures Additionally, the Futures Industry Act 1993 was Exchange Bhd (KLOFFE) had a challenging year both amended in October 1998 to allow the participation of in 1998 and 1999, seeing many new developments asset managers and unit trusts in the futures industry. and changes in the industry. In tandem, the Securities Commission (SC) also issued guidelines for the licensing of futures fund managers One of the more significant events was the signing and futures fund managers’ representatives. This paves of the Sale and Purchase Agreement in July 1998 the way for asset managers to obtain futures fund between KLSE and the shareholders of KLOFFE Capital managers’ licences and trade in futures contracts. Sdn Bhd (the holding company of KLOFFE), namely In addition to this, unit trust companies subject to the Renong Bhd, HLG Capital Bhd, New Straits Times SC’s Guidelines on Unit Trust Funds will be exempted Press (M) Bhd and Rashid Hussain Bhd. The take-over from licensing requirements under the Act, and can was finalised in December 1998 when KLSE now trade in futures contracts. This is a development completed the acquisition of KLOFFE Capital. KLSE that is expected to increase participation in KLOFFE and KLOFFE are currently working together in and enhance volume levels. identifying areas where both parties would be able to maximise the benefits from the acquisition.
48 Annual Report 1999
Prior to May 1999, KLOFFE provided front-end clearing c) End to End Testing functions while the Malaysian Derivatives Clearing Subsequent to the joint integration testing exercises House (MDCH) performed the back-end clearing and prior to the launch of the various systems, the functions for KLOFFE traded products. It was later industry had the opportunity to utilise the solution decided, at industry level, that MDCH should provide in a production mirrored environment. This both front and back end clearing functions for KLOFFE. afforded the members an opportunity to test their Hence, in early 1999, KLOFFE focused on the internal systems against the new Y2K ready completion and implementation of the new derivatives industry solution in a meaningful and realistic industry solution and at the same time, addressed its manner. It should be noted that most of the Y2K readiness. The following summarises the steps taken systems solutions utilised by KLOFFE members are by the various industry partners in achieving this goal. provided and monitored by KLOFFE and its clearing house. This will minimise the risks of a) Renovation/Replacement/Internal Testing member Y2K system failures having an adverse In order to address Y2K issues and extend the level impact on the industry. of services provided to the industry, KLOFFE undertook renovation exercises, whereas MDCH d) Roll-out implemented a new clearing system. The Malaysian derivatives industry is fortunate in some ways, in On 10 May 1999, KLOFFE implemented its Y2K that its Y2K application related issues will be ready solution as part of the roll-out of the encountered well in advance of the roll-over to the Malaysian derivatives Y2K industry solution. new millennium. This is because the industry trades future contracts and Y2K application related issues e) Contingency Planning arise with the introduction of Y2K expiring KLOFFE is in the process of finalising its own contracts. KLOFFE and MDCH have all thoroughly internal Y2K contingency plans and is an active tested their internal solutions, inclusive of their member of the Malaysian Capital Markets applications, hardware and operating systems. Contingency Planning Y2K Steering Committee. The aim of this Steering Committee is to ensure b) Joint Integration Testing that Y2K contingency planning is addressed at Other than undertaking their own internal testing industry level. exercises, KLOFFE and its members worked together to undertake testing at industry level, f) Change Freeze addressing the relevant 1999 and 2000 dates. The joint integration testing exercises proved the Y2K As a Y2K precautionary measure, the industry has readiness of the industry solution in terms of collectively decided to implement a change freeze systems and operational procedures. during the last quarter of 1999.
49 Kuala Lumpur Stock Exchange
Future Plans Promotion
Future plans include the launch of options on the KLSE On the marketing and promotion front, the focus for Composite Index (which will position KLOFFE as the 1999 has been to promote KLOFFE more aggressively first exchange to trade options contracts in Malaysia) in view of the current regional competition faced and and individual stock options, to provide investors with to place KLOFFE as a creditable futures and options a wider range of equity derivative instruments to hedge exchange in the region. KLOFFE will continue its their underlying portfolio. In terms of new product annual participation in the European Derivatives research, KLOFFE is looking into the possibility of Exhibition organised by Futures & Options World introducing a KLSE-based sectoral index derivative in (UK). This year KLOFFE participated as part of a the future. delegation with the Commodity and Monetary Exchange of Malaysia (COMMEX) and MDCH. The purpose of participating in these exhibitions is to Education market and promote KLOFFE, its product(s) and the benefits to the investing public. Such exhibitions also To further build a strong presence in both the local enable us to update ourselves on the latest and international market, KLOFFE lined up a number developments in the futures and options industry by of projects to help increase its trading volume and meeting the various representatives of international market awareness in 1998/1999. Amongst them are derivatives exchanges and by attending the special ongoing educational symposiums and roadshows in presentations by other exchanges. collaboration with KLOFFE’s trading members which are targeted at the investing public. More emphasis will be placed on conducting presentations for fund managers, remisiers and members of other professions in the financial industry. These presentations will be divided into different levels, from the basics of trading to other topics of interest.
50 Annual Report 1999
Research Institute of Investment Analysts Malaysia RIIAM
Haji Wan Fauzi Wan Mahmood 1998/99 was a very significant year for RIIAM. Director The planned activities revolved around training programmes tailored for the investors, market participants and the KLSE Group.
RIIAM organised some 154 training sessions/ programmes, encompassing customised in-house and public programmes for KLSE Group staff, as well as training programmes comprising technical and other programmes for various target audiences in the soft skills were conducted for KLSE Group. RIIAM industry. This works out to an average of about developed it own modules for Staff Development and 13 sessions per month. Management Development Programmes and a total of 1,823 participants attended these programmes.
Working Together Growth of KLSE-RIS The various recent regulatory changes and the current economic crisis also caused a significant shift in the The KLSE-RIS web-site (www.klse-ris.com.my) gained focus of RIIAM’s programmes. We started some tremendous popularity in 1999. Its enhancement specially designed programmes to address some of the project was completed during the first quarter of the current issues such as risk management, corporate year whereby its capacity was expanded from a governance, Y2K and regulatory updates. In running monthly maximum of 4 million hits to 10 million hits. such programmes, we solicited the co-operation of The system recorded a monthly average of more than some relevant professional organisations, such as the 7 million hits and had almost 30,000 users from Malaysian Association of Certified Public Accountants almost 80 countries. (MACPA), the Institute of Internal Auditors Malaysia (IIAM) as well as local universities. International Linkages
On the international front, in 1999, RIIAM continued Widening Reach to play an active role as a member society of the The RIIAM Diploma in Investment Analysis programme Asian Securities Analysts Federation (ASAF), has come into its sixth year in 1999. A total of seven representing Malaysia. RIIAM is proud to have been classes, three in KL and two each in Penang and given the trust and honour to host the 1999 ASAF Kuching were conducted. In addition to existing Annual Conference which was held from 10-12 strength, more local lecturers were recruited to cater to October 1999. The Conference “Planning for Economic the needs of the classes. Recovery: Platform for a Better Future”, was well attended by international and local participants. With the restructuring of the KLSE Group in June 1998, RIIAM was entrusted with the responsibility of taking RIIAM will continue to pursue its objectives of over as the training arm of the KLSE Group; RIIAM was providing choice investor education programmes whilst also required to function as a financially separate attending to the training needs of the industry and entity. During the period, 85 sessions of in-house KLSE Group.
51 Kuala Lumpur Stock Exchange
Calendar 28 November 1998 Of Events
4 February 1999 23 February 1999
FIBV General Assembly 25 – 27 October 1998 The KLSE successfully hosted the 38th FIBV General Assembly and Annual Meeting in Kuala Lumpur from 25 – 27 October 1998, with over 125 delegates Amendments to Listing Requirements from 40 countries participating in the assembly. The KLSE announced several amendments to the Listing KLSE has been a member of FIBV (abbreviated Requirements relating to take-overs and mergers that from the French – Federation Internationale des would promote enhanced disclosure by public listed Bourses de Valeurs) since 1975.
25 – 27 October 1998 companies. The amendments were consequential to the prescription of the new Malaysian Code on Takeovers
4 January 1999 and Mergers 1998, which superceded and repealed PACAP/FMA Finance Conference the previous Code of Take-overs and Mergers 1987. KLSE sponsored the 10th Annual PACAP/FMA Finance Conference held from 26 – 28 October 1998 in Kuala Lumpur. Organised by the Pacific Basin Capital KLSE Group Hari Raya & Chinese New Year Lunch Markets (PACAP) Research Centre and the Financial The KLSE celebrated the Hari Raya and Chinese New Management Association International (FMA), the Year festivities on 4 February 1999 at the Annex, Conference brought together almost 200 delegates Exchange Square. More than 800 KLSE Group staff from over 20 countries. PACAP also organised attended the event where the opportunity was also a joint session with the FIBV delegates to discuss taken by Yayasan BSKL to make financial contributions 4 1999 February 26 – 28 October 1998 issues and challenges experienced recently by to 55 charitable organisations. Asia-Pacific financial markets.
Standard Remisiers’ Agreement 22nd KLSE Annual General Meeting The KLSE approved a standard remisiers’ agreement The 22nd KLSE Annual General Meeting held on which would apply to all stockbroking companies and 28 November 1998, had close to 100 attendees their remisiers. Amongst the significant areas covered comprising KLSE Committee Members, representatives by the agreement are the duties and obligations of stockbroking companies and KLSE Group Senior of remisiers, remisiers’ security deposits as well as the Management. rights and duties of the stockbroking companies. 9 1999 February 28 November 1998 28 November The agreement took effect on 9 February 1999.
ANNA Extraordinary General Meeting The KLSE hosted the Association of National Visits to the Exchange Numbering Agencies (ANNA) Extraordinary General The KLSE received two prominent visits from Meeting from 30 November – 1 December 1998. YB Dato’ Nazri Abdul Aziz, Deputy Minister of Finance ANNA is the umbrella body for agencies responsible II and the Hon. John Moore, Australian Minister of for issuing International Securities Identification Defence on 23 and 24 February 1999, respectively. Numbers (ISINs) for their respective countries. Detailed briefings on the current and future 30 November – 30 November 1 December 1998 16 countries were represented at this meeting. developments of KLSE were conducted for both visits. 23 – 24 February 1999 23 – 24 February
52 Annual Report 1999
KLSE strengthens corporate accountability of public Affiliate membership of IOSCO listed companies KLSE became an affiliate member of the International The KLSE announced requirements on quarterly Organisation of Securities Commissions (IOSCO) in reporting of financial statements by public listed May 1999. The membership will serve as another companies, to enhance corporate disclosure. platform for KLSE to learn from other members, and To enhance corporate governance, KLSE also also present its views and opinions in various areas of 11 March 1999 announced restrictions on the number of directorships. 1999 End May securities regulation.
Contribution to JE Trust Fund 10th Annual KLSE-FPLC Golf Tournament & Lunch The KLSE, stockbroking companies and public listed The 10th Annual KLSE-FPLC Golf Tournament companies jointly contributed RM1 million to the & Lunch which was held on 20 March 1999 marked Japanese Encephalitis (JE) Trust Fund at a ceremony held a farewell to DYMM Seri Paduka Baginda Yang on 6 July 1999. The Trust Fund is a special fund to provide di-Pertuan Agong Tuanku Jaafar ibni Almarhum Tuanku 6 July 1999 assistance to the victims and to sponsor the activities Abdul Rahman whose term as the Agong ended
20 March 1999 involved in containing the outbreak of the disease. in April 1999.
Institutional Settlement Service KLSE launches Syariah Index The Institutional Settlement Service (ISS) was launched The KLSE launched a new index called the KLSE on 15 July 1999 to facilitate the settlement of trades of Syariah Index, to expand participation in the institutional investors directly with the clearing house. stockmarket from local and foreign investors who Offered by SCANS, the ISS will enhance the current are keen to invest in securities approved by the Islamic Delivery versus Payment (DVP) environment by 17 April 1999 principles of Syariah. 15 July 1999 extending clearing membership to include resident custodian banks and institutional investors. Familiarisation visits to public listed companies The Executive Chairman led a group of senior Opening of Balai Maklumat BSKL management team members to PROTON Bhd on In line with KLSE’s objectives to enhance investor 23 April 1999 for the first familiarisation visit for 1999. education, the Exchange opened its third Balai Subsequently, similar visits to Star Publications Berhad Maklumat BSKL, in Johor Bahru on 26 July 1999 (30 July 1999) and Artwright Holdings Berhad which was officiated by YAB Dato’ Haji Abdul Ghani 23 April 1999 (3 September 1999) were organised. bin Othman, the Menteri Besar of Johor. Subsequently, the fourth Balai Maklumat BSKL, in Kuching was 26 July 1999 Commencement of industry dialogues officially opened on 26 October 1999 by the Chief Minister of Sarawak, YAB Datuk Patinggi Tan Sri The KLSE began another series of industry dialogue Dr Haji Abdul Taib Mahmud. sessions with previous and new industry dialogue partners. These sessions provide KLSE with the opportunity to participate in an open forum which KLSE Listing Information Network (KLSE LINK) allows for the interchange of ideas and thoughts on On 8 October 1999, the KLSE launched the KLSE LINK 23 April 1999 issues relating to all parties concerned. to the public. An internet-based facility, the KLSE LINK enhances corporate disclosure for investors. 8 October 1999 6 July 1999 MCD Call-Direct MCD Call-Direct was launched on 22 October 1999 to assist CDS account holders to obtain their CDS account balances via the telephone. General information on other services offered by MCD is also available. 22 October 1999 23 April 1999
20 March 1999
22 October 1999
26 July 1999 Financial Statements
Report Of The Committee 55
Statement By The Committee 60
Statutory Declaration 60
Auditors’ Report 61
Balance Sheets 62
Income And Expenditure Accounts 63
Consolidated Cash Flow Statement 64
Notes To The Accounts 67 Annual Report 1999 Report Of The Committee
The Committee hereby submit their report together with the audited accounts of the Exchange and of the Group for the financial year ended 30 June, 1999.
Principal Activities
The principal activities of the Exchange are to provide, regulate and maintain facilities for conducting the business of a stock exchange in Malaysia.
The principal activities of the subsidiaries are described in Note 9 to the accounts.
There were no significant changes in these activities during the financial year, except for the addition of the options and financial futures exchange activities as disclosed in the significant events note below.
Results
Group Exchange RM RM
Excess of income over expenditure after taxation 192,562,788 177,308,879 Minority interests (3,511,981) —
Excess of income over expenditure after taxation and minority interests 189,050,807 177,308,879 Transfer to Compensation Fund (212,146,440) (206,000,000) Accumulated funds brought forward 1,085,891,383 654,399,355
Accumulated funds carried forward 1,062,795,750 625,708,234
Reserves and Provisions
There were no material transfers to or from reserves or provisions during the financial year other than the transfers made to the Compensation Funds of Malaysian Central Depository Sdn. Bhd. and the Kuala Lumpur Stock Exchange as disclosed in Notes 18 and 23 to the accounts respectively.
Membership Fees
As at 30 June, 1999
(i) membership fees received from past and present members at RM10,000 each amounted to RM2,950,000 (1998: RM2,920,000); and
55 Kuala Lumpur Stock Exchange
Report Of The Committee
Membership Fees (cont’d)
(ii) a total contribution of RM91,000,000 (1998: RM80,000,000) was received from members as follows:
No of Members Total Contributions Brought Carried Contribution Brought Carried forward Additions forward per Member forward Additions forward RM’000 RM’000 RM’000 RM’000 3 2 5 5,000 15,000 10,000 25,000 50 1 51 1,000 50,000 1,000 51,000 5 — 5 3,000 15,000 — 15,000
58 3 61 80,000 11,000 91,000
Bad and Doubtful Debts
Before the income and expenditure accounts and balance sheets were made out, the Committee took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and adequate provision had been made for doubtful debts.
At the date of this report, the Committee is not aware of any circumstances which would render the amount written off for bad debts or the amount of provision for doubtful debts in the accounts of the Exchange and of the Group inadequate to any substantial extent.
Current Assets
Before the income and expenditure accounts and balance sheets were made out, the Committee took reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business their values as shown in the accounting records of the Exchange and of the Group have been written down to an amount which they might be expected so to realise.
At the date of this report, the Committee is not aware of any circumstances which would render the values attributed to the current assets in the accounts of the Exchange and of the Group misleading.
Valuation Methods
At the date of this report, the Committee is not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Exchange and of the Group misleading or inappropriate.
56 Annual Report 1999
Contingent and Other Liabilities
At the date of this report, there does not exist:
(a) any charge on the assets of the Exchange or of the Group which has arisen since the end of the financial year which secures the liabilities of any other person; or
(b) any contingent liability of the Exchange or of the Group which has arisen since the end of the financial year.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Committee, will or may substantially affect the ability of the Exchange or of the Group to meet their obligations when they fall due.
Change of Circumstances
At the date of this report, the Committee is not aware of any circumstances not otherwise dealt with in this report or the accounts of the Exchange or of the Group which would render any amount stated in the accounts misleading.
Items of an Unusual Nature
The results of the operations of the Exchange and of the Group during the financial year were not, in the opinion of the Committee, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Committee, to affect substantially the results of the operations of the Exchange or of the Group for the financial year in which this report is made.
Significant Events
(i) On 22 July, 1998, the Exchange entered into a Sales and Purchase Agreement for the acquisition of 19,998,002 ordinary shares of RM1 each in KLOFFE Capital Sdn. Bhd. (representing a 100% equity interest) for a cash consideration of RM35,000,000. The said acquisition was completed on 31 December, 1998 at a revised cash consideration of RM27,000,000.
(ii) On 2 December, 1996, Securities Clearing Automated Network Services Sdn. Bhd. (“SCANS”), a wholly owned subsidiary, entered into an agreement with Virtual Commerce Holdings Sdn. Bhd. to dispose off its entire interest in its subsidiary, KLSE Chilong Systems Sdn. Bhd. for a cash consideration of RM2,978,946. The said disposal was completed upon obtaining the approval of the Securities Commission on 11 January, 1999.
57 Kuala Lumpur Stock Exchange
Report Of The Committee
Group Rationalisation
During the year, the Group embarked onto a rationalisation exercise to streamline the Group’s activities and structure. Pursuant to this exercise, subsequent to the financial year end, the Exchange entered into agreements with SCANS to acquire:
(i) 1,020,000 ordinary shares representing 51% equity interest in Malaysian Share Registration Services Sdn. Bhd. (“MSRS”), for a cash consideration of RM1,020,000.
(ii) 137,501 ordinary shares representing 55% equity interest in KLSE-Bernama Real-Time Information Services Sdn. Bhd. (“KULBER”), for a cash consideration of RM8,190,207 which is to be adjusted based on the attributable Net Tangible Assets on the expected completion date.
Subsequent Event
Subsequent to the financial year, the Exchange subscribed for all 20,000,000 new ordinary shares of RM1 each in KLOFFE Capital Sdn. Bhd. (KLOFFE Capital), a wholly owned subsidiary. KLOFFE Capital in turn also subscribed for all 20,000,000 new ordinary shares of RM1 each in The Kuala Lumpur Options & Financial Futures Exchange Bhd (a wholly owned subsidiary of KLOFFE Capital). Both transactions were satisfied by way of capitalisation of inter- company balances with the balance in cash.
Committee Members
The Committee Members who served since the date of the last report are:
Dato’ Mohammed Azlan Hashim Chan Guan Seng (elected on 5 December, 1996) Dato’ Ranita Mohd Hussein Tan Kim Leong Abdul Kadir Haji Md Kassim Koh Kee Tee (elected on 26 November, 1997) Dato’ Hwang Sing Lue (elected on 28 November, 1998) Mohaiyani Shamsudin (elected on 28 November, 1998) Ng Wu Hong (retired on 28 November, 1998 and re-elected effective 1 January, 1999) Datuk Tiah Thee Kian (retired on 28 October, 1998) Dato’ Nik Mohamed Nik Yahya (retired on 28 November, 1998)
Dato’ Mohammed Azlan Hashim, Dato’ Ranita Mohd Hussein, Tan Kim Leong and Abdul Kadir Haji Md Kassim were appointed by the Minister of Finance pursuant to Section 8(3) of the Securities Industry Act, 1983 and are not subject to retirement by rotation.
In accordance with Article 10.3(1) of the Exchange’s Articles of Association, two of the current Elected Committee Members are required to retire at the 23rd Annual General Meeting. Pursuant to Article 10.3(2), the two so retiring are Chan Guan Seng and Koh Kee Tee. Pursuant to Article 10.3(3), both gentlemen are eligible for re-election.
In accordance with Section 129 of the Companies Act, 1965, Dato’ Hwang Sing Lue retires on exceeding the age of 70 years at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election.
58 Annual Report 1999
Committee Members’ Benefits
During and at the end of the financial year, no arrangements subsisted to which the Exchange or its subsidiaries is a party with the object of enabling Committee Members of the Exchange to acquire benefits by means of the acquisition of shares in or debentures of any other body corporate.
Since the end of the previous financial year, no Committee Member of the Exchange has received or become entitled to receive a benefit (other than the fixed salary of a full-time employee of the Exchange, reimbursement of expenditure incurred in attending Committee Meetings in the form of meeting allowances and any other benefits in kind as disclosed in the accounts) by reason of a contract made by the Exchange or a related corporation with the Committee Member or with a firm of which the Committee Member is a member, or with a company in which the Committee Member has a substantial financial interest.
Committee Members’ Interests
The Exchange is a company limited by guarantee and thus has no shares in which the Committee Members could have an interest. Similarly, the Exchange has not issued any debentures.
None of the Committee Members in office at the end of the financial year had any interest in shares in its related corporations during the financial year.
Auditors
Our auditors, Messrs. Hanafiah Raslan & Mohamad, will be retiring at the forthcoming Annual General Meeting and will be seeking re-appointment under the name of Arthur Andersen & Co.
Signed on behalf of the Committee in accordance with a resolution of the Committee Members
DATO’ MOHAMMED AZLAN HASHIM
CHAN GUAN SENG
Kuala Lumpur 24 September, 1999
59 Kuala Lumpur Stock Exchange Statement By The Committee
We, DATO’ MOHAMMED AZLAN HASHIM and CHAN GUAN SENG, being two of the Committee Members of KUALA LUMPUR STOCK EXCHANGE, do hereby state that, in the opinion of the Committee, the accompanying balance sheets of the Exchange and of the Group as at 30 June, 1999 and the income and expenditure accounts of the Exchange and of the Group and the cash flow statement of the Group for the year then ended, together with the notes thereto, give a true and fair view of the state of affairs of the Exchange and of the Group as at 30 June, 1999 and of the results of the Exchange and of the Group and cash flows of the Group for the year then ended, and have been properly drawn up in accordance with applicable approved accounting standards.
Signed on behalf of the Committee in accordance with a resolution of the Committee Members
DATO’ MOHAMMED AZLAN HASHIM
CHAN GUAN SENG
Kuala Lumpur 24 September, 1999
Statutory Declaration
I, DATO’ MOHD SALLEH ABDUL MAJID, the officer primarily responsible for the financial management of KUALA LUMPUR STOCK EXCHANGE, do solemnly and sincerely declare that the accompanying balance sheets of the Exchange and of the Group as at 30 June, 1999 and the income and expenditure accounts of the Exchange and of the Group and the cash flow statement of the Group for the year then ended, together with the notes thereto are, to the best of my knowledge and belief correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the ) abovenamed DATO’ MOHD SALLEH ) ABDUL MAJID at Kuala Lumpur in ) Wilayah Persekutuan on 24 September, 1999 ) DATO’ MOHD SALLEH ABDUL MAJID
Before me:
Commissioner for Oaths
60 Annual Report 1999 Auditors’ Report
To the Members of KUALA LUMPUR STOCK EXCHANGE
We have audited the accounts of KUALA LUMPUR STOCK EXCHANGE (the Exchange) and the consolidated accounts of KUALA LUMPUR STOCK EXCHANGE AND ITS SUBSIDIARIES (the Group) as at 30 June, 1999. These accounts are the responsibility of the Committee Members. Our responsibility is to express an opinion on these accounts based on our audit.
We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and significant estimates made by the Committee Members, as well as evaluating the overall accounts presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion,
(a) the accounts give a true and fair view of the state of affairs of the Exchange and of the Group as at 30 June, 1999 and of the results of the Exchange and of the Group and cash flows of the Group for the year then ended, and have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards; and
(b) the accounting and other records and the registers required by the Act to be kept by the Exchange and its subsidiaries have been properly kept in accordance with the provisions of the Act.
We are satisfied that the accounts of the subsidiaries that have been consolidated with the Exchange’s accounts are in form and content appropriate and proper for the purposes of the preparation of the consolidated accounts and we have received satisfactory information and explanations required by us for these purposes.
The audit reports on the accounts of the subsidiaries were not subject to any qualification or any adverse comment made under subsection (3) of Section 174 of the Act.
HANAFIAH RASLAN & MOHAMAD WONG KANG HWEE No. AF 0002 No. 1116/1/2000(J) Public Accountants Partner of the Firm
24 September, 1999
61 Kuala Lumpur Stock Exchange Balance Sheets 30 June, 1999
Group Exchange Note 1999 1998 1999 1998 RM RM RM RM
CURRENT ASSETS Cash and bank balances 3,205,102 4,328,978 666,542 258,314 Short term deposits 3 649,477,970 917,440,259 162,774,887 292,501,137 Debtors 4 128,159,446 63,130,112 39,353,052 20,063,966 Stocks 248,018 290,562 248,018 290,562 Investments 5 156,379,302 99,133,506 156,310,622 98,898,990 Due from subsidiaries — — 5,923,266 28,683,584 Due from associated company 801,865 — — —
938,271,703 1,084,323,417 365,276,387 440,696,553
CURRENT LIABILITIES Bank overdrafts 6 21,176,649 15,543,670 — — Short term borrowings 7 3,600,000 — — — Trade creditors 5,077,758 4,831,472 — — Taxation — 138,596,590 — 732,300 Due to subsidiaries 8 — — 13,570,261 26,286,172 Sundry creditors 79,210,010 72,618,767 36,986,244 41,745,906
109,064,417 231,590,499 50,556,505 68,764,378
NET CURRENT ASSETS 829,207,286 852,732,918 314,719,882 371,932,175 SUBSIDIARIES 9 — — 61,060,731 16,436,502 ASSOCIATED COMPANY 10 5,680,328 — — — OTHER INVESTMENTS 11 172,372 497,567 — — FIXED ASSETS 12 443,674,737 440,187,994 383,374,481 393,610,167 STAFF LOANS RECEIVABLE 13 15,015,081 15,901,930 14,055,638 9,027,647 INTANGIBLE ASSETS 14 912,991 127,222 — — DEFERRED TAXATION 15 (6,743,000) (6,868,650) (3,601,000) (3,601,000) LONG TERM LIABILITY 16 (49,951,498) (50,086,136) (49,951,498) (50,086,136)
1,237,968,297 1,252,492,845 719,658,234 737,319,355
Represented by: MEMBERSHIP FEES 17 93,950,000 82,920,000 93,950,000 82,920,000 ACCUMULATED FUNDS 1,062,795,750 1,085,891,383 625,708,234 654,399,355 RESERVE ARISING ON CONSOLIDATION — 9,958,835 — —
1,156,745,750 1,178,770,218 719,658,234 737,319,355 COMPENSATION FUND 18 39,677,440 33,531,000 — — MINORITY INTERESTS 41,545,107 40,191,627 — —
1,237,968,297 1,252,492,845 719,658,234 737,319,355
The accompanying notes are an integral part of these balance sheets.
62 Annual Report 1999 Income And Expenditure Accounts for the year ended 30 June, 1999
Group Exchange Note 1999 1998 1999 1998 RM RM RM RM
Operating revenue 19 313,414,864 392,352,337 253,739,233 213,892,648
Excess of income over expenditure before taxation 20 183,645,072 82,133,352 209,120,179 61,381,075 Share of loss of associated company (142,817) — — —
183,502,255 82,133,352 209,120,179 61,381,075 Taxation 22 9,060,533 (45,292,471) (31,811,300) (33,485,000)
Excess of income over expenditure after taxation 192,562,788 36,840,881 177,308,879 27,896,075 Minority interests (3,511,981) (3,162,289) — —
Excess of income over expenditure after taxation and minority interests 189,050,807 33,678,592 177,308,879 27,896,075 Accumulated funds brought forward 1,085,891,383 1,056,943,791 654,399,355 626,503,280
1,274,942,190 1,090,622,383 831,708,234 654,399,355 Transfer to Compensation Funds 23 (212,146,440) (4,731,000) (206,000,000) —
Accumulated funds carried forward 1,062,795,750 1,085,891,383 625,708,234 654,399,355
The accompanying notes are an integral part of these accounts.
63 Kuala Lumpur Stock Exchange Consolidated Cash Flow Statement for the year ended 30 June, 1999
Note 1999 1998 RM RM
CASH FLOW FROM OPERATING ACTIVITIES Excess of income over expenditure before taxation 183,645,072 82,133,352 Adjustment for: Transfer to KLSE Compensation Fund (206,000,000) — Share of loss of associated company 142,817 — Depreciation 69,046,109 59,616,786 Fixed assets written off 278,574 1,273,828 Amortisation of intangible assets 937,954 143,304 Bad and doubtful debts 8,845,119 10,340,669 Preliminary and pre-operating expenses written off — 145,639 Gain on sales of fixed assets (68,974) (3,750,118) Goodwill on consolidation written off 1,326,098 — Net gain on disposal of a subsidiary (1,031,936) — (Write back)/provision for diminution in value of investment securities (66,353,309) 52,232,121 Recreational club memberships benefits 411,715 186,940 (Gain)/loss on disposal of investments (3,352,226) 75,564,161 Interest income (67,711,689) (93,076,481) Gross dividend income (3,526,849) (3,366,740)
(Deficit)/excess of income over expenditure before working capital changes (83,411,525) 181,443,461 (Increase)/decrease in debtors (65,029,334) 231,698,359 Decrease in stocks 42,544 67,326 Decrease in creditors (391,310) (40,563,121) Increase in amount due from associated company (228,159) —
Cash (used in)/generated from operations (149,017,784) 372,646,025 Taxes paid (135,757,038) (73,999,964)
Net cash (used in)/generated from operating activities (284,774,822) 298,646,061
CASH FLOW FROM INVESTING ACTIVITIES Dividends received 3,526,849 3,366,740 Dividends paid to minority interests (1,710,000) (979,875) Purchase of a subsidiary * A (31,853,074) — Disposal of a subsidiary * B (1,993,890) — Increase in intangible assets (1,724,977) — Purchase of club memberships (86,520) (217,157) Decrease/(increase) in loans granted to staff 886,849 (5,840,100) Interest received 67,711,689 97,483,671 Purchase of fixed assets (52,944,886) (163,365,763) Proceeds from sale of fixed assets 1,216,505 9,640,730 Net sale/(purchase) of investment securities 12,531,771 (34,180,494)
Net cash used in investing activities (4,439,684) (94,092,248)
64 Annual Report 1999
Note 1999 1998 RM RM
CASH FLOW FROM FINANCING ACTIVITIES Decrease in long term liability (134,638) (538,561) Increase in membership fees 11,030,000 8,050,000
Net cash generated from financing activities 10,895,362 7,511,439
Net (decrease)/increase in cash and cash equivalents (278,319,144) 212,065,252 Cash and cash equivalents at beginning of year 906,225,567 694,160,315
Cash and cash equivalents at end of year 627,906,423 906,225,567
Cash and cash equivalents comprise: Cash and bank balances 3,205,102 4,328,978 Short term borrowings (24,776,649) (15,543,670) Short term deposits 649,477,970 917,440,259
627,906,423 906,225,567
* Notes to the Consolidated Cash Flow Statement
A. The fair values of assets acquired and liabilities assumed from the acquisition of KLOFFE Capital Sdn. Bhd., a subsidiary are as follows: 1999 RM
Cash and bank balances 319,349 Short term deposits 1,703,550 Sundry debtors 1,294,361 Due from associated company 573,706 Bank overdraft (349,595) Short term borrowings (3,600,000) Short term loan (1,333,332) Sundry creditors (10,419,941) Fixed assets 23,281,164 Intangible assets 15,746 Investment in associated company 5,823,145 Term loan (1,593,046) Preference shares (40)
Share of net assets acquired 15,715,067 Goodwill on consolidation 11,284,933
Total purchase consideration 27,000,000 Less: Cash and bank balances (4,853,074)
Cash flow on acquisition, net of cash acquired (31,853,074)
65 Kuala Lumpur Stock Exchange
Consolidated Cash Flow Statement for the year ended 30 June, 1999
B. The fair values of assets disposed and liabilities relinquished from the disposal of KLSE Chilong Systems Sdn. Bhd., a subsidiary are as follows: 1999 RM
Cash and bank balances 303,397 Short term deposits 4,669,439 Trade debtors 361,698 Sundry debtors 691,494 Due from associated company 350 Trade creditors (3,742,412) Sundry creditors (1,206,458) Taxation (254,992) Due to related companies (679,230) Fixed assets 2,267,093 Intangible assets 17,000 Deferred taxation (125,000) Translation reserve (41,051) Minority interest (314,318)
1,947,010 Gain on disposal 1,031,936
Proceeds from disposal 2,978,946 Less: Cash and bank balances (4,972,836)
Cash flow on acquisition, net of cash disposed (1,993,890)
The accompanying notes are an integral part of this statement.
66 Annual Report 1999 Notes To The Accounts 30 June, 1999
1. Principal Activities
The principal activities of the Exchange are to provide, regulate and maintain facilities for conducting the business of a stock exchange in Malaysia.
The principal activities of the subsidiaries are described in Note 9 to the accounts.
There were no significant changes in these activities during the financial year, except for the addition of the options and financial futures exchange activities as disclosed in Note 24(i) to the accounts.
2. Significant Accounting Policies
(a) Basis of Accounting The accounts are prepared under the historical cost convention and comply with applicable approved accounting standards.
(b) Basis of Consolidation The consolidated accounts include the accounts of the Exchange and all its subsidiaries made up to the end of the financial year.
The results of subsidiaries are included in the consolidated income and expenditure account from the effective dates of their acquisition. Related company transactions are eliminated on consolidation and the consolidated accounts reflect external transactions only.
At the date of acquisition, the fair values of the subsidiary companies’ net assets are determined and these values are incorporated in the consolidated accounts. The difference between the cost of investments and the net assets of the subsidiary companies at the date of acquisition represents goodwill or reserve arising on consolidation. Goodwill net of reserve, arising on consolidation is written off to the income and expenditure account.
(c) Currency Conversion and Translation Transactions in foreign currencies during the year are converted into Ringgit Malaysia at rates of exchange approximating those ruling at the transaction dates. Foreign currency monetary assets and liabilities at the balance sheet date are translated into Ringgit Malaysia at rates of exchange approximating those ruling at that date. All exchange gains or losses are dealt with in the income and expenditure accounts.
(d) Fixed Assets and Depreciation Fixed assets are stated at cost less accumulated depreciation. Depreciation on other fixed assets is provided on a straight line basis calculated to write off the cost of each asset over its estimated useful life as follows: Leasehold land – long term 99 years Building and office lots 2% Renovations 20% Office equipment, electrical installation, furniture and fittings 10% – 20% Computers and office automation 20% – 33.33% Motor vehicles 20%
67 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
2. Significant Accounting Policies (cont’d)
(d) Fixed Assets and Depreciation (cont’d) Building under construction in the previous financial year was not depreciated. The useful life of certain computer equipment belonging to a subsidiary acquired during the year has been reduced from 20% (5 years) to an average ranging from 22% (4.5 years) to 67% (1.5 years) to address the Year 2000 issue. The resultant accelerated depreciation charge of RM4,969,121 has been included in the Group’s current year’s depreciation charge as reflected in the Group’s income and expenditure account.
(e) Stocks Stocks representing handbooks, listing manuals and other souvenir items, are stated at the lower of cost (applied on a first-in, first-out basis) and net realisable value.
(f) Subscriptions The monthly subscription fees for members, dealers’ representatives, trainee dealers’ representatives and corporate nominees for both the years 1998 and 1999 were RM400, RM250, RM50 and RM300 respectively.
(g) Provision for Retirement Benefits Exchange Non-executive staff Retirement benefits of the Exchange for non-executive staff are paid to the Employees Provident Fund and have been charged against income for the year.
Executive staff With effect from 1 July, 1987, retirement benefits of the Exchange for executive staff are paid to an approved scheme at a rate as determined by the Exchange with the advice of an actuary and such payments have been charged against income for the year.
In accordance with the rules of the Retirement Benefit Scheme, a valuation of the fund must be performed by an actuary at least once every three years.
Subsidiaries (i) Securities Clearing Automated Network Services Sdn. Bhd. (ii) Malaysian Central Depository Sdn. Bhd.
Retirement benefits of the above subsidiaries for executive and non-unionised staff are paid to an approved scheme at a rate determined by the subsidiaries with the advice of an actuary and such payments have been charged against income for the year.
In accordance with the rules of the Retirement Benefit Scheme, a valuation of the fund must be performed by an actuary at least once every three years.
68 Annual Report 1999
2. Significant Accounting Policies (cont’d)
(h) Leased Assets The cost of assets acquired under finance lease agreements are capitalised. The depreciation policy on these assets is similar to that of the Group’s other assets as set out in (d) above. Outstanding obligations due under the lease agreements after deducting finance expenses are included as liabilities in the accounts. The finance expenses of the lease rentals are charged to the income and expenditure accounts over the period of the respective agreements.
Lease rental payments on operating leases are charged to the income and expenditure accounts in the year they become payable.
(i) Investments (i) Investments in subsidiaries are stated at cost less provision for any permanent diminution in value.
(ii) Short term investments comprising investment in quoted shares and loan stocks are stated at the lower of cost and market value determined on an aggregate basis.
(j) Deferred Taxation Deferred taxation is provided under the liability method in respect of all material timing differences except where it is reasonably expected that the tax effects of such deferrals will continue in the foreseeable future.
(k) Intangible Assets Intangible assets comprise:
(i) Central Depository System (CDS) development cost expenditure for the development and implementation of the CDS. The CDS development cost is being amortised over a period of 7 years.
(ii) Preliminary and pre-operating expenses of dormant subsidiaries which are written off upon the commencement of operations of these subsidiaries.
(iii) Value Added Network Services (VANS) license which is amortised over a period of 5 years.
(iv) Purchased goodwill is amortised over a twelve month period commencing January 1999. Purchased goodwill relates to excess of purchased consideration over the value of physical assets purchased, arising from the acquisition of the business of operating and maintaining the KLOFFE Automated Trading System.
69 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
3. Short Term Deposits
Group Exchange 1999 1998 1999 1998 RM RM RM RM
Compensation Fund Deposits with licensed banks — 206,000,000 — 206,000,000
Others Deposits with: Licensed banks 472,635,465 439,414,773 106,667,390 56,816,534 Licensed finance companies 147,112,187 268,738,669 40,247,179 26,397,786 Discount houses 29,730,318 3,286,817 15,860,318 3,286,817
649,477,970 917,440,259 162,774,887 292,501,137
Included in short term deposits are: Group Exchange 1999 1998 1999 1998 RM RM RM RM
Deposits pledged with licensed banks for banking facilities granted 220,716,000 50,196,000 716,000 1,367,600
Short term deposits of the Group and Exchange amounting to RM20,312,887 (1998: RM19,444,539) are managed by fund managers on behalf of the Exchange. In the previous financial year, the Exchange has allocated and set aside RM206 million in separate bank accounts to meet the needs of the KLSE Compensation Fund as and when required. This amount was transferred in the current financial year to the KLSE Compensation Fund itself as disclosed in Notes 23 and 27 to the accounts.
4. Debtors
Group Exchange 1999 1998 1999 1998 RM RM RM RM
Trade debtors 92,256,054 41,659,757 17,394,391 4,781,783 Sundry debtors 55,085,954 32,277,029 26,680,566 15,521,629
147,342,008 73,936,786 44,074,957 20,303,412 Provision for doubtful debts (19,182,562) (10,806,674) (4,721,905) (239,446)
128,159,446 63,130,112 39,353,052 20,063,966
70 Annual Report 1999
4. Debtors (cont’d)
Included in trade debtors of the Group is an amount of RM41,399,220 (1998: RM24,255,430) owing by Member companies of the Exchange to a subsidiary under a credit facility scheme.
5. Investments
Group Exchange 1999 1998 1999 1998 RM RM RM RM
At cost: Quoted shares: – in Malaysia 133,141,057 137,022,620 133,105,127 136,285,737 – outside Malaysia 32,750 32,750 — — Quoted loan stocks in Malaysia 482,444 1,858,048 482,444 1,858,048 Unit trusts 32,286,396 36,358,969 32,286,396 36,358,969
165,942,647 175,272,387 165,873,967 174,502,754 Less: Provision for diminution in value (9,563,345) (76,138,881) (9,563,345) (75,603,764)
156,379,302 99,133,506 156,310,622 98,898,990
Market value 156,517,141 99,133,506 156,310,622 98,898,990
Investments of the Group and Exchange with a carrying value amounting to RM119,406,173 (1998: RM69,997,817) are managed by fund managers on behalf of the Group and the Exchange.
6. Bank Overdrafts
The bank overdrafts bear interest of between 7.25% to 11.90% (1998: 10.85% to 13.60%) per annum.
Bank overdraft of a subsidiary amounting to RM452,097 is unsecured. The remaining bank overdraft of the Group of RM20,724,552 (1998: RM15,543,670) is secured against fixed deposits as stated in Note 3.
7. Short Term Borrowings
The short term borrowings of the Group bear interest of between 5.65% to 11.85% (1998: 9.55% to 15.7%) per annum, of which RM2,000,000 is secured by a negative pledge over the assets of a subsidiary.
71 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
8. Due to Subsidiaries
Exchange The amounts due to subsidiaries are unsecured, interest free and have no fixed terms of repayment.
9. Subsidiaries
Exchange Note 1999 1998 RM RM
Investment in unquoted shares, at cost (i) 43,436,502 16,436,502 Amount due from a subsidiary (ii) 17,624,229 —
61,060,731 16,436,502
(i) Details of the subsidiaries are as follows:
Effective Name of company interest Principal activities 1999 1998 %% Incorporated in Malaysia: (a) Securities Clearing 100 100 Providing facilities for clearing contracts Automated Network Services between members of the Exchange Sdn. Bhd. (“SCANS”) and computer and allied services to the Group.
(b) KLSE-Bernama Real-Time Information Services Sdn. Bhd. 55 55 Compiling, providing and disseminating real-time share price and other relevant financial economic information.
(c) KLSE Chilong Systems Sdn. Bhd. — 60 Distributing computerised display systems to provide real-time linkages between a stock exchange and all relevant bodies within the securities industry.
(d) Malaysian Central 55 55 To operate and maintain a central Depository Sdn. Bhd. depository system, providing custodian and registration facilities in respect of shares, stocks and other securities.
(e) Malaysian Share Registration 51 51 Providing share registration services. Services Sdn. Bhd.
72 Annual Report 1999
9. Subsidiaries (cont’d)
Effective Name of company interest Principal activities 1999 1998 %%
(f) KLSE Realty Sdn. Bhd. 100 100 Dormant – intended principal activity is real estate investment.
(g) Malaysian Central Depository To act as nominees for Malaysian Nominees Sdn. Bhd. 55 55 Central Depository Sdn. Bhd. and to receive securities and property on deposit or for safe-custody or management.
(h) KLOFFE Capital Sdn. Bhd.* 100 — Investment holding and the promotion of derivative instruments and exchanges.
(i) The Kuala Lumpur 100 — To establish, maintain, conduct, operate Options & Financial Futures and promote a market or markets for the Exchange Bhd.* (KLOFFE) trading of futures and options contracts and facilities for the registration of dealings and settlement of trades in such contracts.
(j) KLOFFE Information 100 — Dormant – intended principal activities Systems Sdn. Bhd.* are to provide information technology and management services.
Incorporated in the Republic of Singapore: (k) KLSE Chilong Systems — 60 Distributing computerised display (Singapore) Pte. Ltd ** systems to provide real time linkage between the Exchange and the relevant bodies within the securities industry in Singapore.
* Audited by Arthur Andersen & Co, Malaysia ** Audited by Arthur Andersen & Co, Singapore
(ii) The amount due from a subsidiary represents an unsecured advance to KLOFFE for working capital purposes. Subsequent to the financial year, the Exchange capitalised these advances as additional capital in KLOFFE Capital Sdn. Bhd. and KLOFFE as explained in Note 26 to the accounts.
73 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
10. Associated Company
Group 1999 1998 RM RM
Unquoted shares, at cost 4,000,000 — Share of post acquisition profit 1,680,328 —
5,680,328 —
The analysis of the associated company is as follows: 1999 1998 RM RM
Group’s share of net tangible assets 5,680,328 —
The associated company which is incorporated in Malaysia, is as follows: Effective Name of company interest Principal activities 1999 1998 %% Malaysian Derivatives Clearing House Bhd. 50 — Providing clearing facilities for futures and options contracts.
The acquisition of the associated company was derived from the acquisition of KLOFFE Capital Sdn. Bhd. as explained in Note 9 to the accounts.
11. Other Investments
Group 1999 1998 RM RM
Recreational club memberships, at cost 497,567 467,350 Add: Acquired during the year 86,520 217,157 Less: Transferred to directors (411,715) (186,940)
172,372 497,567
The club memberships are for the use of directors of a subsidiary.
74 Annual Report 1999
12. Fixed Assets
Group Office equipment, electrical Land and installation, Computers buildings furniture and office Motor 1999 Note 12(a) and fittings automation vehicles Total RM RM RM RM RM Cost At beginning of year 367,315,086 50,754,509 218,747,562 9,440,862 646,258,019 Subsidiary acquired — 2,176,677 45,883,463 785,342 48,845,482 Subsidiary disposed (470,692) (1,352,992) (3,530,849) (162,721) (5,517,254) Additions 11,379,868 9,600,745 29,306,668 2,657,605 52,944,886 Disposals — (924,875) (257,448) (2,678,483) (3,860,806)
At end of year 378,224,262 60,254,064 290,149,396 10,042,605 738,670,327
Accumulated Depreciation At beginning of year 8,661,365 17,148,374 175,520,051 4,740,235 206,070,025 Subsidiary acquired — 816,939 24,251,072 496,307 25,564,318 Subsidiary disposed (198,524) (668,404) (2,236,159) (147,074) (3,250,161) Charge for the year 7,701,736 11,466,884 47,647,631 2,229,858 69,046,109 Disposals — (248,388) (252,339) (1,933,974) (2,434,701)
At end of year 16,164,577 28,515,405 244,930,256 5,385,352 294,995,590
Net Book Value 362,059,685 31,738,659 45,219,140 4,657,253 443,674,737
1998 Cost At beginning of year 280,320,925 27,209,157 246,287,386 8,981,092 562,798,560 Additions 93,718,572 32,436,162 34,957,484 2,253,545 163,365,763 Disposals (6,724,411) (8,890,810) (62,497,308) (1,793,775) (79,906,304)
At end of year 367,315,086 50,754,509 218,747,562 9,440,862 646,258,019
Accumulated Depreciation At beginning of year 6,192,704 12,502,495 196,679,663 4,361,742 219,736,604 Charge for the year 5,851,504 10,585,513 41,283,631 1,896,138 59,616,786 Disposals (3,382,843) (5,939,634) (62,443,243) (1,517,645) (73,283,365)
At end of year 8,661,365 17,148,374 175,520,051 4,740,235 206,070,025
Net Book Value 358,653,721 33,606,135 43,227,511 4,700,627 440,187,994
75 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
12. Fixed Assets (cont’d)
Exchange Office equipment, electrical Land and installation, Computers buildings furniture and office Motor 1999 Note 12(a) and fittings automation vehicles Total RM RM RM RM RM Cost At beginning of year 349,675,957 36,127,383 115,256,688 5,344,433 506,404,461 Additions 11,375,914 9,228,489 5,719,667 2,169,870 28,493,940 Disposals — (387,884) — (327,572) (715,456)
At end of year 361,051,871 44,967,988 120,976,355 7,186,731 534,182,945
Accumulated Depreciation At beginning of year 7,362,363 11,662,797 91,238,647 2,530,487 112,794,294 Charge for the year 6,542,856 9,187,574 21,085,419 1,402,341 38,218,190 Disposals — (608) — (203,412) (204,020)
At end of year 13,905,219 20,849,763 112,324,066 3,729,416 150,808,464
Net Book Value 347,146,652 24,118,225 8,652,289 3,457,315 383,374,481
1998 Cost At beginning of year 269,991,904 18,623,809 161,190,052 4,612,914 454,418,679 Additions 84,221,183 24,403,890 13,349,450 1,515,125 123,489,648 Disposals (4,537,130) (6,900,316) (59,282,814) (783,606) (71,503,866)
At end of year 349,675,957 36,127,383 115,256,688 5,344,433 506,404,461
Accumulated Depreciation At beginning of year 3,650,568 7,783,153 126,635,292 2,100,761 140,169,774 Charge for the year 5,334,617 8,231,752 23,886,169 1,057,112 38,509,650 Disposals (1,622,822) (4,352,108) (59,282,814) (627,386) (65,885,130)
At end of year 7,362,363 11,662,797 91,238,647 2,530,487 112,794,294
Net Book Value 342,313,594 24,464,586 24,018,041 2,813,946 393,610,167
76 Annual Report 1999
12. (a) Land and Buildings (cont’d)
Group Building Leasehold under Building 1999 land construction and office lots Renovations Total RM RM RM RM RM Cost At beginning of year 60,817,500 — 301,547,175 4,950,411 367,315,086 Additions — — 11,375,914 3,954 11,379,868 Subsidiary disposed — — — (470,692) (470,692)
At end of year 60,817,500 — 312,923,089 4,483,673 378,224,262
Accumulated Depreciation At beginning of year 2,693,140 — 5,473,632 494,593 8,661,365 Charge for the year 538,223 — 6,269,237 894,276 7,701,736 Subsidiary disposed — — — (198,524) (198,524)
At end of year 3,231,363 — 11,742,869 1,190,345 16,164,577
Net Book Value 57,586,137 — 301,180,220 3,293,328 362,059,685
1998 Cost At beginning of year 53,317,500 212,137,274 10,819,246 4,046,905 280,320,925 Additions 7,500,000 57,434,951 24,511,144 4,272,477 93,718,572 Transfer (out)/in — (269,572,225) 269,572,225 — — Disposals — — (3,355,440) (3,368,971) (6,724,411)
At end of year 60,817,500 — 301,547,175 4,950,411 367,315,086
Accumulated Depreciation At beginning of year 2,154,579 — 1,009,567 3,028,558 6,192,704 Charge for the year 538,561 — 5,000,935 312,008 5,851,504 Disposals — — (536,870) (2,845,973) (3,382,843)
At end of year 2,693,140 — 5,473,632 494,593 8,661,365
Net Book Value 58,124,360 — 296,073,543 4,455,818 358,653,721
77 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
12. (a) Land and Buildings (cont’d)
Exchange Building Leasehold under Building 1999 land construction and office lots Renovations Total RM RM RM RM RM Cost At beginning of year 60,817,500 — 288,858,457 — 349,675,957 Additions — — 11,375,914 — 11,375,914
At end of year 60,817,500 — 300,234,371 — 361,051,871
Accumulated Depreciation At beginning of year 2,693,140 — 4,669,223 — 7,362,363 Charge for the year 538,223 — 6,004,633 — 6,542,856
At end of year 3,231,363 — 10,673,856 — 13,905,219
Net Book Value 57,586,137 — 289,560,515 — 347,146,652
1998 Cost At beginning of year 53,317,500 212,137,274 3,355,440 1,181,690 269,991,904 Additions 7,500,000 57,434,951 19,286,232 — 84,221,183 Transfer (out)/in — (269,572,225) 269,572,225 — — Disposals — — (3,355,440) (1,181,690) (4,537,130)
At end of year 60,817,500 — 288,858,457 — 349,675,957
Accumulated Depreciation At beginning of year 2,154,579 — 469,762 1,026,227 3,650,568 Charge for the year 538,561 — 4,736,331 59,725 5,334,617 Disposals — — (536,870) (1,085,952) (1,622,822)
At end of year 2,693,140 — 4,669,223 — 7,362,363
Net Book Value 58,124,360 — 284,189,234 — 342,313,594
Office lots represent office and car park space in multistorey buildings.
78 Annual Report 1999
12. (a) Land and Buildings (cont’d)
Included in the fixed assets of the Group and the Exchange are the following cost of fully depreciated assets which are still in use:
Group Exchange 1999 1998 1999 1998 RM RM RM RM
Buildings, office lots and renovations 154,439 9,359 — — Office equipment, furniture and fittings 6,478,674 3,368,654 4,595,470 1,853,258 Computer equipment 138,204,825 90,630,305 57,061,814 43,598,180 Motor vehicles 1,249,569 709,593 1,113,700 353,682
13. Staff Loans Receivable
Group Exchange 1999 1998 1999 1998 RM RM RM RM
Housing loans 13,753,693 13,537,347 13,196,532 8,069,567 Vehicle loans 2,891,235 4,023,082 1,840,694 1,862,256 Computer loans 2,804 106,729 — —
Portion repayable within twelve months included in sundry debtors (1,632,651) (1,765,228) (981,588) (904,176)
15,015,081 15,901,930 14,055,638 9,027,647
The staff housing loans are secured against the properties of the borrowers.
79 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
14. Intangible Assets
Group 1999 1998 RM RM
At cost, VANS license — 20,000 Less: Amortisation — (3,000)
— 17,000
CDS Development cost 982,130 982,130 Less: Amortisation (982,130) (904,282)
— 77,848
Preliminary expenses 65,682 28,450 Pre-operating expenses 385,433 149,563 Purchased goodwill 1,720,212 —
2,171,327 178,013 Less: Amount written off — (145,639) Accumulated amortisation (1,258,336) —
912,991 32,374
912,991 127,222
Included in pre-operating expenses are audit fees for the year of RM800 (1998: RM300).
15. Deferred Taxation
Group Exchange 1999 1998 1999 1998 RM RM RM RM
(a) At beginning of year 6,868,650 7,153,000 3,601,000 3,601,000 Subsidiary disposed (125,650) — — — Transfer from income and expenditure accounts — (284,350) — —
At end of year 6,743,000 6,868,650 3,601,000 3,601,000
80 Annual Report 1999
15. Deferred Taxation (cont’d)
Group Exchange 1999 1998 1999 1998 RM RM RM RM
(b) Timing differences between depreciation and corresponding capital allowances 28,086,617 32,585,869 16,645,319 19,083,486 Timing differences on provisions (4,004,617) (8,055,869) (3,785,319) (6,223,486)
Net amount of all timing differences 24,082,000 24,530,000 12,860,000 12,860,000
16. Long Term Liability
Group and Exchange 1999 1998 RM RM
Long term liability 50,490,059 50,624,697 Less: Portion repayable within twelve months included in sundry creditors (538,561) (538,561)
49,951,498 50,086,136
Long term liability relates to the amount payable to the Government of Malaysia for the purchase of leasehold land. The amount is payable in 99 annual instalments of RM538,561 each.
17. Membership Fees
As at 30 June, 1999 (i) membership fees received from past and present members at RM10,000 each amounted to RM2,950,000 (1998: RM2,920,000); and (ii) a total contribution of RM91,000,000 (1998: RM80,000,000) was received from members as follows:
No of Members Total Contributions Brought Carried Contribution Brought Carried forward Additions forward per Member forward Additions forward RM’000 RM’000 RM’000 RM’000 1999 3 2 5 5,000 15,000 10,000 25,000 50 1 51 1,000 50,000 1,000 51,000 5 — 5 3,000 15,000 — 15,000
58 3 61 80,000 11,000 91,000
81 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
17. Membership Fees (cont’d)
No of Members Total Contributions Brought Carried Contribution Brought Carried forward Additions forward per Member forward Additions forward RM’000 RM’000 RM’000 RM’000 1998 3 — 3 5,000 15,000 — 15,000 48 2 50 1,000 48,000 2,000 50,000 3 2 5 3,000 9,000 6,000 15,000
54 4 58 72,000 8,000 80,000
18. Compensation Fund
Group 1999 1998 RM RM
At beginning of year 33,531,000 28,800,000 Transfer from Income and Expenditure Accounts 6,146,440 4,731,000
At end of year 39,677,440 33,531,000
In 1997, a subsidiary, Malaysian Central Depository Sdn. Bhd. (“MCD”), established a compensation fund in accordance with Rule 34 of the Rules of the Malaysian Central Depository Sdn. Bhd. Withdrawals from the Fund are governed by the internal guidelines of Malaysian Central Depository Sdn. Bhd. for the Compensation Fund.
19. Operating Revenue
The operating revenue of the Exchange comprises gross dividend received from subsidiaries, fees from members’ subscription, listing, registration, transfer and perusal, sales of publications, System on Computerised Order Routing and Execution (SCORE) fees, equipment rental income, other income derived from the operation of the Exchange and interest income.
The operating revenue of the Group further includes clearing fees for contracts between Member companies of the Exchange, rental of computer terminals to subscribers, fees from Central Depository System (CDS) operations, subscription, gross trade fees for option contracts less rebates, interest and dividend income.
82 Annual Report 1999
20. Excess of Income Over Expenditure Before Taxation
Group Exchange 1999 1998 1999 1998 RM RM RM RM
This is arrived at after charging/(crediting): Auditors’ remuneration 150,600 155,515 40,000 35,000 Amortisation of intangible assets 937,954 143,304 — — Preliminary and pre-operating expenses written off — 145,639 — — Depreciation 69,046,109 59,616,786 38,218,190 38,509,650 Bad and doubtful debts 8,845,119 10,340,669 4,487,162 — Fixed assets written off 278,574 1,273,828 — 502,408 (Gain)/loss on disposal of investments (3,352,226) 75,564,161 (2,685,558) 75,437,906 Interest expense – subsidiary — — 10,049 — – others 809,793 1,180,558 — — Office rental – subsidiary — — 26,544 — – others 2,280,992 4,280,637 315,929 904,083 (Writeback)/provision for diminution in value of investments (66,575,536) 52,232,121 (66,040,419) 51,697,004 Remuneration of – Committee Members Fees 306,000 251,200 — — Other emoluments 520,200 879,173 — — – Other directors of subsidiaries: Fees 236,200 363,973 — — Other emoluments 81,790 80,500 — — Rental of equipment 366,698 1,373,036 — — Recreational club memberships benefit to directors* 411,715 186,940 — — Retirement benefits 3,681,705 3,270,679 2,093,107 1,898,010 Gross dividend income from – subsidiaries — — (145,970,833) (147,345,833) – investments quoted in Malaysia (3,526,849) (3,366,740) (3,526,849) (3,327,555) Equipment rental income (18,396,511) (17,439,649) (4,324,435) (15,839,694) Building rental – subsidiaries — — (10,869,696) (9,058,080) – others (897,679) — (614,991) — Net gain on sale of fixed assets (68,974) (3,750,118) (74,708) (3,161,755) Gain on disposal of a subsidiary (1,031,936) — — — Interest income from – subsidiary — — (557,991) — – others (67,711,689) (93,076,481) (24,343,826) (23,104,030)
* This represents cost of recreational club memberships transferred to directors of a subsidiary.
83 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
21. Significant Related Party Transactions
Exchange 1999 1998 RM RM
Transfer fees paid to subsidiary 54,271 — Royalty paid to subsidiary 900,020 1,119,810 Information services income from subsidiary (111,247) — Net service income from subsidiaries (1,085,226) (5,137,184)
22. Taxation
Group Exchange 1999 1998 1999 1998 RM RM RM RM
Current year charge 474,167 45,576,821 41,346,000 33,485,000 Overprovision in prior years (9,534,700) — (9,534,700) — Transfer from deferred taxation — (284,350) — —
(9,060,533) 45,292,471 31,811,300 33,485,000
The tax charge for the current financial year is on dividend income. There is no tax charge on other income from other sources as the amount payable for the year is waived in accordance with the Income Tax (Amendment) Act, 1999.
84 Annual Report 1999
23. Transfer to Compensation Funds
Group Exchange 1999 1998 1999 1998 RM RM RM RM
MCD Compensation Fund (Note 18) 6,146,440 4,731,000 — — KLSE Compensation Fund 206,000,000 — 206,000,000 —
212,146,440 4,731,000 206,000,000 —
The transfer to KLSE Compensation Fund was made pursuant to Section 62 (d) of the Securities Industries Act, 1983.
24. Significant Events
(i) On 22 July, 1998, the Exchange entered into a Sales and Purchase Agreement for the acquisition of 19,998,002 ordinary shares of RM1 each in KLOFFE Capital Sdn. Bhd. (representing a 100% equity interest) for a cash consideration of RM35,000,000. The said acquisition was completed on 31 December, 1998 at a revised cash consideration of RM27,000,000.
(ii) On 2 December, 1996, Securities Clearing Automated Network Services Sdn. Bhd. (“SCANS”), a wholly owned subsidiary, entered into an agreement with Virtual Commerce Holdings Sdn. Bhd. to dispose off its entire interest in its subsidiary, KLSE Chilong Systems Sdn. Bhd. for a cash consideration of RM2,978,946. The said disposal was completed upon obtaining the approval of the Securities Commission on 11 January, 1999.
25. Group Rationalisation
During the year, the Group embarked onto a rationalisation exercise to streamline the Group’s activities and structure. Pursuant to this exercise, subsequent to the financial year end, the Exchange entered into agreements with SCANS to acquire:
(i) 1,020,000 ordinary shares representing 51% equity interest in Malaysian Share Registration Services Sdn. Bhd. (“MSRS”), for a cash consideration of RM1,020,000.
(ii) 137,501 ordinary shares representing 55% equity interest in KLSE-Bernama Real-Time Information Services Sdn. Bhd. (“KULBER”), for a cash consideration of RM8,190,207 which is to be adjusted based on the attributable Net Tangible Assets on the expected completion date.
85 Kuala Lumpur Stock Exchange
Notes To The Accounts 30 June, 1999
26. Subsequent Event
Subsequent to the financial year, the Exchange subscribed for all 20,000,000 new ordinary shares of RM1 each in KLOFFE Capital Sdn. Bhd. (KLOFFE Capital), a wholly owned subsidiary. KLOFFE Capital in turn also subscribed for all 20,000,000 new ordinary shares of RM1 each in The Kuala Lumpur Options & Financial Futures Exchange Bhd (a wholly owned subsidiary of KLOFFE Capital). Both transactions were satisfied by way of capitalisation of inter-company balances with the balance in cash.
27. KLSE Compensation Fund
The accounts of the KLSE Compensation Fund for the year ended 30 June, 1999 are as attached and have been accounted for separately from all other properties of Kuala Lumpur Stock Exchange as required by Section 61 of the Securities Industry Act, 1983 (amended 1997).
28. Capital Commitments
Group Exchange 1999 1998 1999 1998 RM RM RM RM
Authorised and contracted for – Office equipment 1,173,400 — 1,165,000 — – Computer and related software 202,860 — 202,860 — – Building 12,680,565 4,836,230 12,680,565 9,638,995 – Furniture and fittings 5,778,544 2,925,417 5,778,544 5,050,923 – Office automation 15,732,511 8,369,864 15,910,511 8,369,864 – Office renovation 57,500 — 57,500 —
35,625,380 16,131,511 35,794,980 23,059,782
Approved but not contracted for – Furniture and fittings 2,874,510 — 2,874,510 — – Office equipment 252,358 — 210,508 — – Computer and related software 2,155,115 3,342,959 2,155,115 1,941,679 – Motor vehicle 899,500 — 899,500 — – Office automation 1,102,174 3,566,667 1,102,174 3,566,667 – Office renovation 859,800 — 859,800 — – Others 480,000 2,302,600 480,000 300,000
8,623,457 9,212,226 8,581,607 5,808,346
86 Annual Report 1999
29. Incorporation
The Exchange was incorporated under the Companies Act, 1965 on 14 December, 1976 as a company limited by guarantee and does not have a share capital. Membership fees and accumulated funds of the Exchange are not distributable to the members of the Exchange.
30. Comparative Figures
Certain comparative figures have been reclassified to conform with current year presentation.
31. Currency
All amounts are stated in Ringgit Malaysia.
87 Kuala Lumpur Stock Exchange KLSE Sub-Committees
AUDIT SUB-COMMITTEE • Ensure that the funds are properly invested and maintained with the view to maximise Objectives returns/yields on investment. • Assist the KLSE Committee in discharging its responsibilities relating to accounting practices of • Appoint appropriate advisors in managing its KLSE and its Group of Companies. surplus funds.
• Ensure the adequacy, efficiency and effectiveness of • Formulate policies and guidelines for the the Group’s administrative, operating and accounting investment of the KLSE and its Group of controls and procedures. Companies’ surplus funds.
• Oversee and evaluate the quality of the audits • Review the investment policy of the KLSE and conducted both by the Group’s internal and its Group of Companies to ensure that optimal external auditors. yield is achieved with minimum risk exposure to the funds. Members 1. Tan Kim Leong (Chairman) Members 2. Abdul Jabbar Majid 1. Dato’ Mohammed Azlan Hashim (Chairman) 3. Chan Guan Seng 2. Dato’ Hwang Sing Lue 4. Benny Ng Wu Hong 3. Koh Kee Tee 4. Harry K Menon 5. Datuk Ramly Ahmad BUDGET AND INVESTMENT SUB-COMMITTEE
Objectives DISPUTES AND DISCIPLINARY SUB-COMMITTEE • Ensure that the KLSE and its Group of Companies have a proper budgetary system in place that will Objectives help to plan, co-ordinate, evaluate and control • Consider matters relating to disputes among financial activities effectively. Member Companies.
• Ensure that proper allocations are made to enable • Consider disciplinary actions against Members, effective and efficient:- Member Companies and Dealers’ Representatives * operations of the KLSE and its Group of of the Exchange. Companies; Members * implementation of the development plans of 1. Dato’ Ranita Mohd Hussein (Chairperson) the KLSE and its Group of Companies; and 2. Abdul Jabbar Majid * utilisation of financial resources. 3. Abdul Kadir Hj Md Kassim 4. Benny Ng Wu Hong • Review and monitor the financial position of the 5. Nik Saghir Mohd Noor KLSE and its Group of Companies. 6. Tan Kim Leong
• Ensure that the cash of the KLSE and its Group of Companies is preserved and secured.
88 Annual Report 1999
RULES AND DEVELOPMENT SUB-COMMITTEE INDEX SUB-COMMITTEE
Objectives Objectives • Review changes, revisions or additions to the • Responsible for the construction and establishment KLSE Rules and Regulations to determine if they of new indices as directed by the KLSE Committee are consistent with the mission and objectives or whenever necessary. of the KLSE. • Assist in other related securities areas, if possible, • Review the role and direction of the KLSE and as determined by the KLSE Committee. its Group of Companies in line with its mission and vision. Members 1. Dato’ Mohammed Azlan Hashim (Chairman) Members 2. Azim Mohd Zabidi 1. Dato’ Mohammed Azlan Hashim (Chairman) 3. Dr. Aziz Abu Hassan 2. Abdul Kadir Hj Md Kassim 4. Iskander Ismail 3. Chan Guan Seng 5. Izzaddin Idris 4. Dato’ Hwang Sing Lue 6. Jamiah Abdul Hamid 5. Johan Raslan Raslan Mohamad 7. Dr. Kok Kim Lian 6. Mohaiyani Shamsudin 8. Dr. John Lee Hin Hock 7. Benny Ng Wu Hong
MEMBERSHIP SUB-COMMITTEE LISTING SUB-COMMITTEE Objectives Objectives • To consider and recommend to the KLSE • Assist the KLSE Committee in discharging all Committee applications for Membership of the matters relating to listing and post-listing functions Exchange pursuant to the Exchange’s Articles of of the KLSE in a speedy and efficient manner. Association and Rules, after having duly interviewed the individual applicant, proposed Members Dealing Members and Non-Dealing Members, as 1. Dato’ Mohammed Azlan Hashim (Chairman) the case may be. 2. Abdul Kadir Hj Md Kassim 3. Chan Guan Seng Members 4. Dato’ Hwang Sing Lue 1. Chan Guan Seng (Chairman) 5. Koh Kee Tee 2. Abdul Kadir Hj Md Kassim 6. Mohaiyani Shamsudin 3. Koh Kee Tee 7. Benny Ng Wu Hong 4. Mohaiyani Shamsudin 8. Tan Kim Leong 9. Dato’ Ranita Mohd Hussein
89 Kuala Lumpur Stock Exchange Monthly High, Low And Closing Indices
COMPOSITE EMAS High Low Closing High Low Closing 1998 July 478.20 385.97 402.65 119.29 99.47 102.97 August 386.44 302.91 302.91 99.70 79.55 79.55 September 445.06 262.70 373.52 115.55 71.60 99.34 October 424.37 360.10 405.33 111.57 95.66 106.12 November 502.15 419.78 501.47 134.56 109.81 134.56 December 586.13 510.85 586.13 146.94 137.31 146.94 1999 January 618.54 561.65 591.43 157.82 142.06 151.22 February 579.55 526.10 542.23 147.47 133.79 137.34 March 531.54 494.57 502.82 134.46 122.47 125.14 April 674.96 527.56 674.96 166.63 131.30 166.63 May 780.29 677.93 743.04 193.34 166.08 181.47 June 829.72 731.01 811.10 211.07 179.44 207.56
INDUSTRIAL CONSUMER PRODUCTS High Low Closing High Low Closing 1998 July 945.76 805.61 836.68 121.86 110.01 114.72 August 812.40 639.44 639.44 112.70 83.86 83.86 September 861.26 545.69 739.10 107.89 73.07 90.62 October 828.15 719.55 789.79 98.88 88.47 95.19 November 967.23 811.88 967.23 119.48 97.56 119.48 December 1,043.52 983.50 1,043.52 127.73 120.82 127.30 1999 January 1,132.55 1,012.93 1,074.75 136.83 124.46 132.05 February 1,054.04 972.14 1,009.89 129.24 120.11 122.14 March 1,001.12 912.27 921.39 120.88 113.58 115.18 April 1,145.27 962.02 1,138.18 146.38 118.09 146.38 May 1,337.36 1,143.85 1,275.14 164.46 145.33 157.16 June 1,418.32 1,258.60 1,380.58 171.76 154.26 169.52
INDUSTRIAL PRODUCTS CONSTRUCTION High Low Closing High Low Closing 1998 July 57.85 50.72 51.77 102.61 77.94 79.80 August 49.85 40.20 40.20 77.47 63.23 63.23 September 56.48 35.36 48.98 115.54 56.76 101.23 October 54.78 47.22 51.88 117.24 94.60 109.10 November 65.73 53.45 65.73 137.42 112.90 137.42 December 71.51 65.90 67.01 147.94 131.87 136.75 1999 January 71.20 66.23 68.36 156.42 135.47 151.03 February 66.93 61.23 62.43 147.53 129.55 134.00 March 61.79 55.83 56.86 130.96 111.90 117.20 April 70.98 59.58 70.98 167.43 124.55 165.22 May 79.39 70.27 73.77 207.07 163.38 192.45 June 87.13 73.70 86.44 241.45 190.90 237.39
90 Annual Report 1999
TRADING/SERVICES FINANCE High Low Closing High Low Closing 1998 July 75.31 60.01 62.23 2,469.95 1,880.61 1,961.08 August 60.29 47.36 47.36 1,890.42 1,616.02 1,695.38 September 67.45 41.58 58.04 2,767.77 1,642.37 2,301.08 October 66.20 56.18 63.13 2,674.13 2,223.92 2,535.42 November 76.86 65.27 76.60 3,345.90 2,626.44 3,345.90 December 90.92 78.22 90.92 3,720.09 3,429.15 3,669.63 1999 January 96.61 86.67 91.67 4,123.29 3,527.83 3,900.68 February 90.11 81.57 83.32 3,763.33 3,390.28 3,544.35 March 81.13 74.40 75.34 3,475.04 3,235.26 3,381.13 April 102.74 80.20 101.45 4,987.11 3,517.22 4,987.11 May 121.06 102.31 114.51 5,759.80 4,927.46 5,362.08 June 131.19 113.55 128.84 6,515.67 5,242.81 6,328.23
PROPERTY PLANTATION High Low Closing High Low Closing 1998 July 583.89 474.40 486.34 1,654.90 1,513.08 1,573.10 August 474.13 403.42 414.61 1,507.06 1,137.37 1,137.37 September 668.32 408.25 560.20 1,462.45 1,017.18 1,259.58 October 629.80 535.97 587.79 1,339.35 1,194.81 1,292.98 November 783.99 608.76 783.99 1,706.49 1,362.12 1,706.49 December 917.13 749.32 781.42 1,875.41 1,663.19 1,830.06 1999 January 827.24 761.51 792.35 1,896.31 1,750.35 1,853.75 February 768.09 687.39 704.74 1,805.91 1,613.47 1,659.49 March 688.84 587.87 614.22 1,626.78 1,386.34 1,426.81 April 812.13 648.75 807.83 1,714.41 1,478.64 1,686.14 May 993.68 789.64 863.87 1,819.34 1,682.71 1,713.37 June 1,080.31 867.29 1,064.73 1,802.65 1,690.88 1,766.92
MINING SECOND BOARD High Low Closing High Low Closing 1998 July 170.57 144.31 159.33 98.26 88.74 89.06 August 163.75 85.90 85.90 87.94 75.64 76.83 September 165.50 78.68 120.25 105.85 75.30 92.69 October 152.66 113.46 143.59 104.67 90.11 98.66 November 242.60 154.60 242.60 172.07 100.90 172.07 December 262.40 220.48 246.16 188.83 151.29 158.37 1999 January 237.24 221.87 222.40 172.90 154.03 163.05 February 241.98 196.39 219.47 157.18 138.56 141.59 March 261.59 208.03 217.64 137.44 107.57 114.70 April 269.13 223.87 228.06 156.00 125.46 151.90 May 248.34 220.42 221.49 173.42 148.16 150.99 June 269.86 221.53 264.46 184.31 151.10 179.77
SYARIAH* High Low Closing 1999 April 106.56 98.10 105.97 May 120.70 106.77 114.75 June 127.34 113.64 125.65
* Officially launched on 17 April 1999
91 Kuala Lumpur Stock Exchange Volume, Value And Indices
KLSE COMPOSITE INDEX Index MONTHLY CLOSING AND 200 DAYS MOVING AVERAGE JULY 1995 – JUNE 1999 1,500
1,200
900
600
300
0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Composite Index Composite Index Moving Average
KLSE EMAS INDEX Index MONTHLY CLOSING AND 200 DAYS MOVING AVERAGE JULY 1995 – JUNE 1999 400
350
300
250
200
150
100
50
0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
EMAS Index EMAS Index Moving Average
92 Annual Report 1999
Volume & Value KLSE INDUSTRIAL INDEX, VOLUME & VALUE Index MONTHLY CLOSING (Billions) (Thousand) JULY 1995 – JUNE 1999 25 2.5
20 2.0
15 1.5
10 1.0
5 0.5
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
Volume & Value KLSE CONSUMER PRODUCTS INDEX, VOLUME & VALUE (Billions) MONTHLY CLOSING Index JULY 1995 – JUNE 1999 6
5
4
3
2
1
0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
93 Kuala Lumpur Stock Exchange
Volume, Value And Indices
Volume & Value KLSE INDUSTRIAL PRODUCTS INDEX, VOLUME & VALUE (Billions) MONTHLY CLOSING Index JULY 1995 – JUNE 1999 12
10
8
6
4
2
0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
Volume & Value KLSE CONSTRUCTION INDEX, VOLUME & VALUE (Billions) MONTHLY CLOSING Index JULY 1995 – JUNE 1999 4.0 600
3.5
3.0 450
2.5
2.0 300
1.5
1.0 150
0.5
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
94 Annual Report 1999
Volume & Value KLSE MINING INDEX, VOLUME & VALUE (Billions) MONTHLY CLOSING Index JULY 1995 – JUNE 1999 1.6 800
1.4 700
1.2 600
1.0 500
0.8 400
0.6 300
0.4 200
0.2 100
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
Volume & Value KLSE TRADING/SERVICES INDEX, VOLUME & VALUE (Billions) MONTHLY CLOSING Index JULY 1995 – JUNE 1999 10.0 200
7.5 150
5.0 100
2.5 50
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
95 Kuala Lumpur Stock Exchange
Volume, Value And Indices
Volume & Value KLSE FINANCE INDEX, VOLUME & VALUE Index MONTHLY CLOSING (Billions) (Thousand) JULY 1995 – JUNE 1999 8
7
6
5
4
3
2
1
0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
Volume & Value KLSE PROPERTY INDEX, VOLUME & VALUE Index MONTHLY CLOSING (Billions) (Thousand) JULY 1995 – JUNE 1999 8 4.0
7 3.5
6 3.0
5 2.5
4 2.0
3 1.5
2 1.0
1 0.5
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
96 Annual Report 1999
Volume & Value KLSE PLANTATION INDEX, VOLUME & VALUE Index (Billions) MONTHLY CLOSING (Thousand) JULY 1995 – JUNE 1999 2.8 3.5
2.4 3.0
2.0 2.5
1.6 2.0
1.2 1.5
0.8 1.0
0.4 0.5
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
Volume & Value KLSE SECOND BOARD INDEX, VOLUME & VALUE (Billions) MONTHLY CLOSING Index JULY 1995 – JUNE 1999 28 700
24 600
20 500
16 400
12 300
8 200
4 100
0 0 JASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ
Volume Value Index
97 Kuala Lumpur Stock Exchange New Listings
From 1 July 1998 to 30 June 1999 New listings: 17
Name of New Listings Board Listed Date Paid-up Capital when first listed (RM) 1 Abric Berhad Second Board 11 Jan 1999 30,000,000 2 Ahmad Zaki Resources Berhad Second Board 9 Jun 1999 30,000,000 3 AKN Technology Berhad Second Board 2 Sep 1998 25,000,000 4 Astral Supreme Berhad Second Board 10 Feb 1999 45,000,000 5 Avangarde Resources Berhad Second Board 13 Aug 1998 35,000,000 6 CB Industrial Product Holding Berhad Second Board 31 May 1999 28,000,000 7 Chin Well Holdings Berhad Main Board 15 Jun 1999 90,000,000 8 Comsa Farms Berhad Second Board 28 Oct 1998 26,800,000 9 FW Industries Berhad Second Board 8 Jul 1998 26,888,000 10 Khind Holdings Berhad Second Board 12 Aug 1998 30,000,000 11 Malaysian AE Models Holdings Berhad Second Board 26 May 1999 33,000,000 12 Merge Energy Berhad Main Board 17 Nov 1998 67,000,000 13 Seacera Tiles Berhad Second Board 27 May 1999 39,999,000 14 SM Summit Holdings Berhad Second Board 1 Jun 1999 30,000,000 15 Takaso Resources Berhad Second Board 16 Mar 1999 23,000,000 16 Unisem (M) Berhad Main Board 30 Jul 1998 143,000,000 17 Yong Tai Berhad Second Board 15 Sep 1998 39,900,000
As at 30.6.1999 As at 30.6.1998 No. of listed companies 745 728 Total market capitalisation (RM billion) 532.04 285.88
1.7.1998 to 1.7.1997 to 30.6.1999 30.6.1998 Total volume (billion units) 72.02 66.84 Total value (RM billion) 135.93 253.55
98 Annual Report 1999 Membership Report
During the year under review (1 July 1998 to 30 June 1999):-
(1) Recognition of Three {3} New Member Companies:
No. Member Company Business Address Registered Address Date of Recognition 1 Utama Securities Sdn Bhd Lot 2465, Jalan Boulevard Utama Lot 363, Jalan Kulas 01.10.98 Boulevard Commercial Centre 93400 Kuching 98000 Miri Sarawak Sarawak Tel: 082-419296 Tel: 085-435577 Fax: 082-424954 Fax: 085-435511
2 Affin-UOB Securities Level 3, Menara Keck Seng Level 32, Menara Keck Seng 01.12.98 Sdn Bhd 203, Jalan Bukit Bintang 203, Jalan Bukit Bintang 55100 Kuala Lumpur 55100 Kuala Lumpur Tel: 03-2438668 Tel: 03-2438668 Fax: 03-2433663 Fax: 03-2433663
3 PTB Securities Sdn Bhd Tingkat 1, 2 & 3 3A01, Block B 15.01.99 No. 61, Jalan Sultan Ismail Menara Amcorp Peti Surat 151 No. 18, Jalan Persiaran Barat Pejabat Pos Besar 46050 Petaling Jaya 20700 Kuala Terengganu Selangor Darul Ehsan Terengganu Darul Iman Tel: 03-7543030 Tel: 09-6235546 Fax: 03-7588716 Fax: 09-6235532
(2) Three {3} Corporations were admitted to Membership of the Exchange, via the following Member Companies:
No. New Corporate Member Name of Member (Corporation) Date of Admission 1 Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 2 Affin-UOB Holdings Affin-UOB Securities Sdn Bhd 01.12.98 Sdn Bhd 3 PTB Securities Holdings PTB Securities Sdn Bhd 15.01.99 Sdn Bhd
(3) Two {2} Natural persons resigned from Membership of the Exchange, viz:
No. Name Member Company Date of Resignation 1 Mohamed Nizam PB Securities Sdn Bhd 31.07.98 Tun Abdul Razak 2 Sia Say Yee Amsteel Securities (M) Sdn Bhd 03.09.98
(4) Demise of Member:
No. Name Member Company Date of Demise 1 Datuk Haji Ali Esa Thong & Kay Hian 02.11.98 Securities Sdn Bhd
99 Kuala Lumpur Stock Exchange
Membership Report
(5) Seventeen {17} individuals were appointed as Corporate Nominees, viz: No. Name Corporate Member Member Company Date of Admission 1 A. Bakar Buyong BBMB Securities (Holdings) BBMB Securities Sdn Bhd 23.07.98 Sdn Bhd 2 Abrizah Dato’ Abdullah Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 3 Ahmad Ezzanee Azizan Straits Asset Holdings Sdn Bhd Straits Securities Sdn Bhd 12.11.98 Mohd Ali Azizan 4To’ Puan Siti Norizam Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98 Mohd Yusoff Sdn Bhd 5 Abdul Wahab Mayban Securities (Holdings) Mayban Securities 08.12.98 Nan Abidin Sdn Bhd Sdn Bhd 6 Ng Seng Leong Jardine Fleming (Malaysia) JF Apex Securities Bhd 15.12.98 Services Sdn Bhd 7 Tan Chong Pen Smith Zain (Malaysia) Sdn Bhd Smith Zain Securities 28.12.98 Sdn Bhd 8 Ban Chee Kheong Datavest Sdn Bhd Amsteel Securities (M) 29.12.98 Sdn Bhd 9 Richard Anthony Magides RHB Capital Berhad Rashid Hussain 04.01.99 Securities Sdn Bhd 10 Ang Poo Guan Malpac Holdings Berhad Malpac Securities Sdn Bhd 07.01.99 11 Ismail Nik Man PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99 12 Yong Yoong Fa Public Consolidated PB Securities Sdn Bhd 11.02.99 Holdings Sdn Bhd 13 Lee Eng Hua Pakatan Canggih Sdn Bhd Kota Bharu Securities 04.03.99 Sdn Bhd 14 Lim Poh Ho Carta Bintang Sdn Bhd SJ Securities Sdn Bhd 14.04.99 15 Najmiyah Abd Hasan Rentak Wira Sdn Bhd UT Securities Sdn Bhd 01.05.99 16 Chang Tuck Chee Arab-Malaysian Securities Arab-Malaysian 01.06.99 @ Philip Chang Holding Sdn Bhd Securities Sdn Bhd 17 Rashid Ismail MIDF Sisma Holdings Sdn Bhd MIDF Sisma 16.06.99 Securities Sdn Bhd
(6) Eleven {11} individuals resigned/ceased as Corporate Nominees, viz: No. Name Corporate Member Member Company Date of Resignation 1 Looi Keng Hwa Olympia Industries Bhd Jupiter Securities Sdn Bhd 16.07.98 2 Tay Thin Hock Pengkalen Capital Bhd Kimara Equities Sdn Bhd 17.08.98 3 Lee Tak Suan Datavest Sdn Bhd Amsteel Securities 11.09.98 (M) Sdn Bhd 4 Patrick Soh Kim Ngiap Carta Bintang Sdn Bhd SJ Securities Sdn Bhd 06.10.98 5 Abdul Wahab KAF-Seagroatt & KAF-Seagroatt & Campbell 30.10.98 Nan Abidin Campbell Berhad Securities Sdn Bhd 6 Baharil Ihzan Hashim Mayban Securities (Holdings) Mayban Securities Sdn Bhd 08.12.98 Sdn Bhd 7 Ng Seng Leong Apex Equity Holdings Berhad JF Apex Securities Bhd 15.12.98 8 Asnah Ahmad SimeSecurities Holdings Sdn Bhd SimeSecurities Sdn Bhd 16.12.98 9 Abdullah Abd Pakatan Canggih Sdn Bhd Kota Bharu Securities 04.03.99 Karim Bajerai Sdn Bhd 10 Lee Siang Korn Arab-Malaysian Securities Arab-Malaysian Securities 01.04.99 @ Lee Siang Chin Holding Sdn Bhd Sdn Bhd 11 Chia Kam Pooi RHB Capital Berhad Rashid Hussain Securities 31.05.99 Sdn Bhd
100 Annual Report 1999
(7) Twenty-six {26} individuals were appointed as Non-Executive Directors, viz:
No. Name Corporate Member Member Company Date of Appointment 1 Leong Kam Weng TA Enterprise Bhd Botly Securities Sdn Bhd 10.07.98 2 Chang Tuck Chee @ TA Enterprise Bhd Botly Securities Sdn Bhd 10.07.98 Philip Chang 3 Chan Gak Keong Pakatan Canggih Sdn Bhd Kota Bharu Securities 11.07.98 Sdn Bhd 4 Dato’ Kamarudin Abu Smith Zain (Malaysia) Sdn Bhd Smith Zain Securities 24.08.98 Sdn Bhd 5 Looi Kheng Hwa Olympia Industries Berhad Jupiter Securities Sdn Bhd 28.08.98 6 Nik Hashim Nik Yusoff Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 7 Haji Iskandar Haji Razali Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 8 Abdul Rashid Haji Aziz Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 9 Datuk Haji Abdul Aziz Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 Haji Hussain 10 Vaseehar Hassan Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 Abdul Razack 11 Francis Ng Hee Chang Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98 12 Yu Choong Cheong Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98 Sdn Bhd 13 Gn Hiang Meng Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98 Sdn Bhd 14 Gen. (Rtd) Dato’ Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98 Ismail Hassan Sdn Bhd 15 Faisol Zulkifli KAF-Seagroatt & Campbell KAF-Seagroatt & Campbell 23.12.98 Securities Holdings Bhd Securities Sdn Bhd 16 Dato’ Mazlan @ PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99 Mohd Nanri Hashim 17 Raja Halinuddin PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99 Raja Halid 18 Mat Zaid Ibrahim PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99 19 Abdul Aziz PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99 Mahmoud Salim 20 Seah Sen Leang Kretam Holdings Berhad InnoSabah Securities 25.03.99 Sdn Bhd 21 Dato’ Nik Mohd Sidek Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 31.03.99 Nik Abu Bakar 22 Ho Chun Fuat Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 31.03.99 23 Lee Siang Korn Arab-Malaysian Securities Arab-Malaysian Securities 01.04.99 @ Lee Siang Chin Holding Sdn Bhd Sdn Bhd 24 Khet Kok Yin Pengkalen Capital Berhad Pengkalen Securities Sdn Bhd 12.04.99 25 Dato’ Rastam Abdul Hadi Pengkalen Capital Berhad Pengkalen Securities Sdn Bhd 12.04.99 26 Khadijah Abdul Khalid Assedina Sdn Bhd Kuala Lumpur City 27.04.99 Securities Sdn Bhd
101 Kuala Lumpur Stock Exchange
Membership Report
(8) Twenty-three {23} individuals resigned as Non-Executive Directors, viz:
No. Name Corporate Member Member Company Date of Resignation 1 Zulkifli Abdul Malek Premier Capital Holdings Premier Capital Securities 29.07.98 Sdn Bhd Sdn Bhd 2 Chong Ah Wah @ Premier Capital Holdings Premier Capital Securities 29.07.98 Chong Kon Kooi Sdn Bhd Sdn Bhd 3 Haji Haris Abdul Hamid Johor Capital Holdings Sdn Bhd PJB Pacific Securities 27.08.98 Sdn Bhd 4 Ahmad Farid Haji Omar Olympia Industries Berhad Jupiter Securities Sdn Bhd 19.09.98 5 Patrick Soh Kim Ngiap Carta Bintang Sdn Bhd SJ Securities Sdn Bhd 06.10.98 6 Paw Swee Choo Pan Pacific Asia Berhad Peninsula Securities Sdn Bhd 10.10.98 7 Leong Kam Weng TA Enterprise Berhad Botly Securities Sdn Bhd 07.12.98 8 Chang Tuck Chee TA Enterprise Berhad Botly Securities Sdn Bhd 07.12.98 @ Philip Chang 9 Elizabeth Sam TCL Premier Holdings Berhad OCBC Securities 31.12.98 (Melaka) Sdn Bhd 10 Ang Poo Guan Malpac Holdings Berhad Malpac Securities Sdn Bhd 07.01.99 11 Tan Sri Mohamed Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 14.01.99 Ngah Said 12 Lynette Mohamed Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 14.01.99 13 Dato’ Yeoh Chin Kee Public Consolidated PB Securities Sdn Bhd 03.03.99 Holdings Sdn Bhd 14 David Alexander K & N Kenanga Holdings Berhad K & N Kenanga Berhad 01.04.99 Cospatrick Douglas-Home 15 Datuk Alladin BBMB Securities (Holdings) BBMB Securities Sdn Bhd 17.04.99 Mohd Hashim Sdn Bhd 16 Dato’ Osman Assedina Sdn Bhd Kuala Lumpur City 26.04.99 Mohd Zain Securities Sdn Bhd 17 Michael Wong Kuan Lee SimeSecurities Holdings Sdn Bhd SimeSecurities Sdn Bhd 29.04.99 18 Dato’ Muhammad Johor Capital Holdings Sdn Bhd PJB Pacific Securities 07.05.99 Ali Hj Hashim Sdn Bhd 19 Tan Sri Datuk (Dr) Johor Capital Holdings Sdn Bhd PJB Pacific Securities 07.05.99 Arshad Ayub Sdn Bhd 20 Zainah Mustafa Johor Capital Holdings Sdn Bhd PJB Pacific Securities 07.05.99 Sdn Bhd 21 Datuk Wong Boon Loong Kretam Holdings Berhad InnoSabah Securities 03.05.99 Sdn Bhd 22 Mohamad Zubairi Malaysian General Investment MGI Securities Sdn Bhd 15.05.99 Ahmad Rubian Corporation Berhad 23 Gn Hiang Meng Affin-UOB Holdings Berhad Affin-UOB Securities 19.05.99 Sdn Bhd
102 Annual Report 1999
(9) Changes of Member Companies’ Name:
No. Member Company New Name Effective Date 1 United Traders UT Securities Sdn Bhd 06.01.99 Securities Sdn Bhd 2 Faiz Securities Sdn Bhd Kota Bharu Securities Sdn Bhd 30.01.99 3 Capitalcorp Securities Fima Securities Sdn Bhd 20.05.99 Sdn Bhd
(10) Changes of Member Companies’ Business Address:
No. Member Company Business Address Effective Date 1 PB Securities Sdn Bhd 27th Floor 02.02.99 Bangunan Public Bank No. 6, Jalan Sultan Sulaiman 50000 Kuala Lumpur Tel: 03-2013011 Fax: 03-2012533
2 JB Securities Sdn Bhd Level 6, 7 & 8 01.03.99 Menara Sarawak Enterprise No. 5, Jalan Bukit Meldrum 80300 Johor Bahru Johor Darul Takzim Tel (General): 07-3332000 Tel (Dealing): 07-3332800 Fax: 07-3354728
3 M & A Securities Sdn Bhd M & A Building 28.06.99 52A, Jalan Sultan Idris Shah 30000 Ipoh, Perak Darul Ridzuan Tel: 05-2419800 Fax: 05-2551015
103 Kuala Lumpur Stock Exchange KLSE Members as at 30 June 1999
MEMBER COMPANY FEDERAL TERRITORY OF KUALA LUMPUR ARAB-MALAYSIAN 15th Floor Members: Corporate Nominees: SECURITIES Bangunan Arab-Malaysian Haji Ismail bin Abdullah SDN BHD No. 55, Jalan Raja Chulan Wong Tee Hing @ 50200 Kuala Lumpur Wong Tee Eng Tel: 03-2382788/99 (General) Arab-Malaysian Mustafa bin Hj Mohd Nor 03-2321866/99 (Dealing) Securities Holdings Ahmad bin Bachok Fax: 03-2383162 Sdn Bhd Chang Tuck Chee @ 03-2303175 Philip Chang (General & Dealing) Telex: AMSEC MA 31796 MA 30869
AFFIN-UOB Level 3, Menara Keck Seng Member: Corporate Nominee: SECURITIES 203, Jalan Bukit Bintang Affin-UOB Holdings To’ Puan Siti Norizam SDN BHD 55100 Kuala Lumpur Sdn Bhd bt Mohd Yusoff Tel: 03-2438668 Fax: 03-2433663
BBMB SECURITIES Level 2, 3 & 4 Member: Corporate Nominees: SDN BHD Menara Olympia BBMB Securities Hassan bin Jaafar Letter Box No. 2 (Holdings) Sdn Bhd A. Bakar Buyong No. 8 Jalan Raja Chulan 50200 Kuala Lumpur Tel: 03-2019900 (General) Fax: 03-2019819 (Finance) 03-2025087 (Dealing) Telex: MA36804 BBSEC (Finance)
BIMB SECURITIES 1st & 2nd Floor Member: Corporate Nominee: SDN BHD Podium Block BIMB Securities Dato’ Dr Abdul Halim Bangunan AMDB (Holdings) Sdn Bhd bin Haji Ismail No. 1, Jalan Lumut 50400 Kuala Lumpur Tel: 03-4433533 (15 lines) Fax: 03-4413433/4412622 03-4414159
CIMB SECURITIES 9th Floor, Commerce Square Member: Corporate Nominees: SDN BHD Jalan Semantan CIMB Holdings Mohd Shukri bin Hussin Damansara Heights Sdn Bhd Gan Soo Jin 50940 Kuala Lumpur Kanajan a/l Samypullay Tel: 03-2532288 Fax: 03-2535533 Telex: MA 30991 CIMSEC
104 Annual Report 1999
FIMA SECURITIES Level 1 & 2, Block G Central Member: Corporate Nominee: SDN BHD Pusat Bandar Damansara Capitalcorp Holdings Mohd Yusof bin Damansara Heights Sdn Bhd Pandak Yatim 50490 Kuala Lumpur Tel: 03-2549966 Fax: 03-2548595 Telex: MA 28040
HLG SECURITIES 21st Floor, Wisma HLA Member: Corporate Nominees: SDN BHD Jalan Raja Chulan HLG Capital Bhd Omar bin Zolkifli 50200 Kuala Lumpur Lee Wai Kok Tel: 03-2022778 03-2452998 (General) Fax: 03-2022390 Telex: MA 31097, MA 33802
INTER-PACIFIC Level 7, Menara Shahzan Insas Member: Corporate Nominees: SECURITIES No. 30, Jalan Sultan Ismail Inter-Pacific Capital Pang Poh Ping SDN BHD 50250 Kuala Lumpur Sdn Bhd Abdul Majid bin Hj Tel: 03-2441888 Mohd Harun Fax: 03-2441686 Telex: MA 31469 IPSEC
JUPITER Level 7, 8 & 9 Members: Corporate Nominee: SECURITIES Menara Olympia Olympia Industries Bhd Yee Yoke Leong SDN BHD No. 8, Jalan Raja Chulan Mohd Saleh bin 50200 Kuala Lumpur Md Yusof Tel: 03-2041888 (General) Lo Kok Kee Fax: 03-2042288 Telex: MA 33713 (JUPSSB)
K & N 801, 8th Floor Member: Corporate Nominees: KENANGA BHD Pernas International Building K & N Kenanga Tengku Noor Zakiah Jalan Sultan Ismail Holdings Bhd binti Tengku Ismail 50250 Kuala Lumpur Haji Abdul Aziz Tel: 03-2629080, 2621490 bin Hashim (30 lines) Dato’ Ramli bin Ismail Fax: 03-2614990, 2635927 Telex: KEN MA 35231, 31276 (Admin)
KAF-SEAGROATT 26th-30th Floor, Menara Weld Member: Corporate Nominee: & CAMPBELL No. 76, Jalan Raja Chulan KAF-Seagroatt & Ahmad bin Kadis SECURITIES 50200 Kuala Lumpur Campbell Holdings Bhd SDN BHD Tel: 03-2081600 Fax: 03-2323464 Telex: SEAGRO MA 32816
105 Kuala Lumpur Stock Exchange
KLSE Members as at 30 June 1999
KUALA LUMPUR 3.07, Level 3 Member: Corporate Nominee: CITY SECURITIES Bangunan Angkasaraya Assedina Sdn Bhd Mohd Nasir bin Ali SDN BHD Jalan Ampang 50450 Kuala Lumpur Tel: 03-2449322 Fax: 03-2448099
LEONG & CO Level 18, Wisma Cyclecarri Members: SDN BHD No. 288, Jalan Raja Laut Leong Kun Kay 50350 Kuala Lumpur Yu Kwei Sim Tel: 03-2928899 (Admin) Anne Leong Sau Leng Fax: 03-2949088 (Admin) Leong Yuen Leng Telex: SHABON MA 31363 Peter Leong Tuck Leng
MAYBAN 30th Floor, Menara Maybank Member: Corporate Nominee: SECURITIES No. 100, Jalan Tun Perak Mayban Securities Abdul Wahab bin SDN BHD 50050 Kuala Lumpur (Holdings) Sdn Bhd Nan Abidin Tel: 03-2323822/33 Fax: 03-2323807 Telex: MA 20294 MAYSEC
MGI SECURITIES 1st & 2nd Floor, Wisma MGIC Member: Corporate Nominee: SDN BHD No. 38, Jalan Dang Wangi Malaysian General No appointment as at 50100 Kuala Lumpur Investment 30.6.1999 Tel: 03-2911889 (General) Corporation Bhd Fax: 03-2930628 (General) Telex: MA 33186 CBSB
MIDF SISMA 17th & 18th Floor Member: Corporate Nominees: SECURITIES Empire Tower MIDF Sisma Holdings Datin Mariam SDN BHD No. 182, Jalan Tun Razak Sdn Bhd Prudence bte Yusof 50400 Kuala Lumpur Rashid bin Ismail Tel: 03-2668888 Fax: 03-2669999 Telex: MIDFS MA 32827
OSK SECURITIES 10th Floor, Plaza OSK Member: Corporate Nominees: BHD Jalan Ampang OSK Holdings Bhd Dato’ Nik Mohamed 50450 Kuala Lumpur bin Nik Yahya Tel: 03-2624388 Chin Cheng Mei Fax: 03-2618254 Wong Chong Kim Ong Leong Huat @ Wong Joo Hing Nik Halim @ Nik Ghazi bin Haji Nik Daud
106 Annual Report 1999
PB SECURITIES 27th Floor Member: Corporate Nominee: SDN BHD Bangunan Public Bank Public Consolidated Yong Yoong Fa No. 6, Jalan Sultan Sulaiman Holdings Sdn Bhd 50000 Kuala Lumpur Tel: 03-2013011 Fax: 03-2012533
PENGKALEN 1st Floor Members: Corporate Nominee: SECURITIES Menara Pengkalen Noorjehan Rahima bt SDN BHD No. 2, Jalan Changkat Ceylon Abdul Hamid Jumat 50200 Kuala Lumpur Leong Kok Wah Tel: 03-2448055 (10 lines) Pengkalen Capital Bhd Loo Kok Yuen Fax: 03-2448082 Telex: MA 31186
RASHID HUSSAIN Level 1, 2, 3 & 5 Member: Corporate Nominees: SECURITIES Tower One, RHB Centre RHB Capital Berhad Tan Sri Dato’ Abdul SDN BHD Jalan Tun Razak Rashid bin Haji Hussain 50400 Kuala Lumpur Tajul Ariffin bin Tel: 03-9852233 Mohd Tahir Fax: 03-9855522 Saiful Bahri bin Zainuddin Telex: MA 31790 RHSSB Richard Anthony Magides
SIMESECURITIES 21st Floor Member: Corporate Nominee: SDN BHD Bangunan Sime Bank SimeSecurities No appointment as at No. 4, Jalan Sultan Sulaiman Holdings Sdn Bhd 30.6.1999 50000 Kuala Lumpur Tel: 03-2749288/778 Fax: 03-2749907 03-2749908 (Trading) Telex: MA 20288 SIMESEC
TA Menara TA One Member: Corporate Nominees: SECURITIES BHD No. 22, Jalan P Ramlee TA Enterprise Bhd Datuk Tiah Thee Kian 50250 Kuala Lumpur Dato’ Mahmud bin Tel: 03-2321277 Haji Ali Fax: 03-2322369 Datin Tan Kuay Fong Telex: TASEC MA 30848 Teh Ghee Kok Ignatius Luke Jr. Tan Keng Hee
MEMBER COMPANY SELANGOR DARUL EHSAN – KAJANG JF APEX 3rd Floor, Wisma Apex Members: Corporate Nominees: SECURITIES BHD 145A-C, Jalan Bukit Apex Equity Chan Guan Seng 43000 Kajang Holdings Bhd Kharul Hurri bin Selangor Darul Ehsan Khalid Abbas Tel: 03-8361118 Jardine Fleming (M) Ng Seng Leong Fax: 03-8374532 Services Sdn Bhd (Admin/Acc) Telex: MA 31617 CHLICK
107 Kuala Lumpur Stock Exchange
KLSE Members as at 30 June 1999
MEMBER COMPANY SELANGOR DARUL EHSAN – KLANG AMSTEEL 1st, 2nd, 3rd & 4th Floors Members: Corporate Nominees: SECURITIES (M) Wisma Amsteel Securities Datavest Sdn Bhd Ban Chee Kheong SDN BHD No. 1, Lintang Pekan Baru Ee Beng Guan Off Jalan Meru Dato’ Hj Abdul Rahim 41050 Klang bin Mohd. Ibrahim Selangor Darul Ehsan Tel: 03-3439999 (28 lines) Fax: 03-3442343/3442350
MEMBER COMPANY SELANGOR DARUL EHSAN – PETALING JAYA HALIM No. 68, Jalan Selangor (52/6) Members: Corporate Nominee: SECURITIES P O Box 561 Uniphoenix No appointment SDN BHD 46770 Petaling Jaya Corporation Bhd as at 30.6.1999 (Cessation of dealing Selangor Darul Ehsan Tengku Abdul Halim activities by the Tel: 03-7555777 Alhaj Ibni Almarhum Securities Commission Fax: 03-7554612 Sultan Ibrahim on 8 June 1998) Hassim bin Haji Baba Chua Hock Seng Loo Khee Kwong Mohd Yusof bin Mohd Rashidi
MOHAIYANI 1st, 2nd & 3rd Floor Members: Corporate Nominee: SECURITIES Plaza Damansara Utama Mohaiyani bt SDN BHD No. 2, Jalan SS21/60 Shamsudin 47400 Petaling Jaya Abdul Hamid bin Selangor Darul Ehsan Abdul Samad Tel: 03-7197345 (6 lines) Nik Aminaldin bin Fax: 03-7181357 Nik Jaafar Abdul Ghani bin Ahmad Asia Equity (Malaysia) Chin Kok Keng Holdings Ltd
SJ SECURITIES Level 3, Holiday Villa Member: Corporate Nominees: SDN BHD No. 9, Jalan SS12/1 Carta Bintang Sdn Bhd Ahmad Azman bin Subang Jaya Abdul Manaf 47500 Petaling Jaya Abdul Rauf bin Ramli Selangor Darul Ehsan Lim Poh Ho Tel: 03-7340202 (General) Fax: 03-7330649 (General) Telex: SJSEC MA 36157
108 Annual Report 1999
MEMBER COMPANY SELANGOR DARUL EHSAN – SHAH ALAM OMEGA 15th Floor Member: Corporate Nominees: SECURITIES Plaza Perangsang Omega Holdings Bhd Abdullah bin Ayub SDN BHD Persiaran Perbandaran Yeo Lee Hoe (Dealer’s licence 40990 Shah Alam Tiah Thee Peng revoked by the Selangor Darul Ehsan Securities Commission Tel: 03-5594900 (20 lines) on 5 June 1998) Fax: 03-5599682 (Admin) 03-5597723 Telex: AT SSB MA 39863
MEMBER COMPANY JOHOR DARUL TAKZIM – JOHOR BAHRU ENG SECURITIES No. 95, Jalan Tun Abdul Razak Member: Corporate Nominees SDN BHD 80000 Johor Bahru Inter-Pacific Capital Lim Khuan Eng Johor Darul Takzim Sdn Bhd Mohd Fuad Foo bin Tel: 07-2231211/2238212 Abdullah Fax: 07-2246266
JB SECURITIES Suite 8.2, Level 8 Members: Corporate Nominees: SDN BHD Menara Sarawak Enterprise Idris bin Osman No. 5, Jalan Bukit Meldrum Dynamic Pearl Sdn Bhd Wan Malek Shahril 80300 Johor Bahru bin Wan Omar Johor Darul Takzim Yap Kai Keng Tel: 07-3332800 (Dealing) 07-3332000 (General) Fax: 07-3348259 Telex: JBSEC MA060166
PENINSULA Level 2, Menara Pelangi Member: Corporate Nominees: SECURITIES Jalan Kuning, Taman Pelangi Pan Pacific Asia Bhd Er Chin Her @ Er Ee SDN BHD 80400 Johor Bahru Haji Rahmat bin Awi Johor Darul Takzim Tel: 07-3333600 (General) Fax: 07-3343770
PJB PACIFIC Podium 2A & 3 Member: Corporate Nominee: SECURITIES Menara Ansar Johor Capital Holdings Johari bin Hassan SDN BHD No. 65, Jalan Trus Sdn Bhd 80000 Johor Bahru Johor Darul Takzim Tel: 07-2222692/2768787 Fax: 07-2765201
MEMBER COMPANY JOHOR DARUL TAKZIM – MUAR KESTREL 57, 59 & 61, Jalan Ali Member: Corporate Nominee: SECURITIES 84000 Muar Tongkah Holdings Bhd Leow Woon Kong @ SDN BHD Johor Darul Takzim Leow Woon Kuang Tel: 06-9532222/9531222 Fax: 06-9516660
109 Kuala Lumpur Stock Exchange
KLSE Members as at 30 June 1999
MEMBER COMPANY JOHOR DARUL TAKZIM – BATU PAHAT SOUTH JOHOR 3rd Floor, Penggaram Complex Member: Corporate Nominees: SECURITIES No. 1, Jalan Abdul Rahman South Johor Equities Koh Kee Tee SDN BHD 83000 Batu Pahat Sdn Bhd Ng Say Keow Johor Darul Takzim Chan Chau Yang Tel: 07-4342282 (Admin) Soh Kim Eng Fax: 07-4327982 Husni bin Hussain Telex: MA 65310 SJSSB
MEMBER COMPANY KEDAH DARUL AMAN ALOR SETAR Lot T-30, 2nd Floor Members: Corporate Nominee: SECURITIES Wisma PKNK Mansor bin Hussin SDN BHD Jalan Sultan Badlishah Kelanamas Capital Dato’ Dr Haji Sallehuddin 05000 Alor Setar Sdn Bhd bin Kassim Kedah Darul Aman Tel: 04-7317088 Fax: 04-7318428
MEMBER COMPANY PERLIS INDERA KAYANGAN UPEN SECURITIES 2nd Floor, Podium Block Members: Corporate Nominee: SDN BHD Bangunan KWSP Abang Zainal Abidin 01000 Kangar bin Abang Ahmad Perlis Indera Kayangan Amal Bakti Sdn Bhd Wong Kum Piew Tel: 04-9765200 Fax: 04-9760411
MEMBER COMPANY KELANTAN DARUL NAIM KOTA BHARU No. 298, Jalan Tok Hakim Member: Corporate Nominee: SECURITIES 15000 Kota Bharu Pakatan Canggih Lee Eng Hua SDN BHD Kelantan Darul Naim Sdn Bhd Tel: 09-7432288 (General) Fax: 09-7485366 (General)
MEMBER COMPANY MELAKA MALACCA No. 1, 3 & 5, Jalan PPM 9 Members: SECURITIES Plaza Pandan Malim Sim Swee Tin SDN BHD Business Park, Balai Panjang Sim Cheng Khuan 75250 Melaka Zainuddin bin Haji Din Tel: 06-3371533 (8 lines) Fax: 06-3371550/3371577
110 Annual Report 1999
OCBC SECURITIES 579, 580 – 581A & B Member: Corporate Nominees: (MELAKA) Taman Melaka Raya TCL Premier Jimmy Tan Soo Sum SDN BHD 75000 Melaka Holdings Bhd Yoichiro Sano Tel: 06-2825211 (General) Loh Teck Yen Fax: 06-2844861 (Admin) Latiff bin Datuk Telex: OSM MA 062658 Tamby Chik Chow Yook Hey @ Chow Yoke Pui
STRAITS Lot 9 & 10, 1st Floor Member: Corporate Nominees: SECURITIES Bangunan Tabung Haji Straits Asset Holdings Goh Choon Hock SDN BHD Jalan Banda Kaba Sdn Bhd Ahmad Ezzanee 75740 Melaka Azizan bin Mohd Tel: 06-2833622 Ali Azizan Fax: 06-2833771 Telex: MA 62855
MEMBER COMPANY NEGERI SEMBILAN DARUL KHUSUS KIMARA 2nd, 9th & 10th Floor Member: Corporate Nominee: EQUITIES Bangunan Yayasan Negeri Pengkalen Capital Bhd Elias bin Abdullah Ng SDN BHD Sembilan, Jalan Yam Tuan 70000 Seremban Negeri Sembilan Darul Khusus Tel: 06-7633888 (General) 06-7638999 Fax: 06-7633889 Telex: KIMARA MA 63989
MALPAC 1st, 2nd & 3rd Floor Members: Corporate Nominee: SECURITIES No. 19 – 21, Jalan Kong Sang Chew Loy Chee SDN BHD 70000 Seremban Gan Teck Chong @ Negeri Sembilan Darul Khusus Gan Kwan Chong Tel: 06-7623131 (20 lines) Tan Chon Sing @ Fax: 06-7620537 Tan Kim Tieng Telex: CTSEC MA 63951 Malpac Holdings Bhd Ang Poo Guan
MEMBER COMPANY PAHANG DARUL MAKMUR WK SECURITIES A-397, A-399 & A-401 Member: Corporate Nominee: SDN BHD Taman Sri Kuantan III Omega Holdings Bhd Zainal bin Ahmad Jalan Beserah 25300 Kuantan Pahang Darul Makmur Tel: 09-5660800 (Admin) 09-5660700 (Trading) Fax: 09-5660801
111 Kuala Lumpur Stock Exchange
KLSE Members as at 30 June 1999
MEMBER COMPANY PENANG A A ANTHONY No. 41-1-1 & 41-2-1 Members: & CO SDN BHD Jalan Cantonment Lim Tiong Chin 10250 Penang Haji Abdul Rahman Tel: 04-2299318 (General) bin Haji Ahmad Fax: 04-2268788 Lim Teong Khoon
HWANG-DBS Levels 2, 3, 4, 7 & 8 Member: Corporate Nominees: SECURITIES BHD Wisma Sri Pinang Hwang-DBS (Malaysia) Dato’ Hwang Sing Lue No. 60, Green Hall Berhad Tunku Nadzaruddin 10200 Penang ibni Tuanku Ja’afar Tel: 04-2636996 (50 lines) Tan Poh Chye Fax: 04-2639597 Hwang Lip Teik Telex: HWANG MA 40909
Shah Alam Branch 16th, 18th-20th Floor, Plaza Masalam No. 2, Jalan Tengku Ampuan Zabedah E9/E, Section 9 40100 Shah Alam Selangor Darul Ehsan Tel: 04-5533288 Fax: 04-5538288
KE-ZAN Wisma Ke-Zan Member: Corporate Nominees: SECURITIES No. 64, Bishop Street Ke-Zan Holdings Md Yusoff bin Dato’ Md Ali SDN BHD 10200 Penang Sdn Bhd Mohd Idris bin Ahmad Jais Tel: 04-2634222 Fax: 04-2622299/2618011 Telex: MA 40323 KE ZAN
SMITH ZAIN 7th & 8th Floor Member: Corporate Nominees: SECURITIES Menara PSCI, No. 39 Smith Zain (Malaysia) Mun Kong Hoe SDN BHD Jalan Sultan Ahmad Shah Sdn Bhd Tan Chong Pen 10050 Penang Tan Giap How Tel: 04-2283355 Fax: 04-2299513 (Finance & Accounts) 04-2297108 (Dealing) 04-2295692 (Settlement) Telex: MA 041341
SOON THEAM No. 111, Jalan Macalister Members: SECURITIES 10400 Penang Yeo Khee Nam SDN BHD Tel: 04-2281868 (Pilot Line) Yeo Khee Bee Fax: 04-2263912 Ahmad Mydin Yeo Khee Aik
112 Annual Report 1999
THONG & Level 5 & 6 Members: Corporate Nominee: KAY HIAN Wisma Sri Pinang Thong Wai Loen SECURITIES No. 60 Green Hall Thong Yue Leong SDN BHD 10200 Penang Kay Hian (M) Holdings Thong Miew Peng Tel: 04-2635481 Sdn Bhd Fax: 04-2635741 Telex: MA 40675 THONG
UT SECURITIES 12th Floor Member: Corporate Nominees: SDN BHD Bangunan Mayban Trust Rentak Wira Sdn Bhd Frederick Ng Kweng Chan No. 3, Penang Street Lee Seong Chong 10200 Penang Najmiyah bt Abd Hasan Tel: 04-2626644/6660 (General) Fax: 04-2617312
MEMBER COMPANY BUTTERWORTH MERCURY Ground, 1st, 2nd & 3rd Floor Members: SECURITIES Wisma UMNO Chew Sing Guan SDN BHD Lorong Bagan Luar Dua Mat Zuki bin Mahmud 12000 Seberang Perai Butterworth, Penang Tel: 04-3322123 Fax: 04-3231813/3312195
MEMBER COMPANY PERAK DARUL RIDZUAN – IPOH BOTLY SECURITIES 1st Floor, Plaza Teh Teng Seng Member: Corporate Nominees: SDN BHD No. 227, Jalan Kampar TA Enterprise Bhd Ee Beng Wat 30250 Ipoh Too Hai Ong Perak Darul Ridzuan Tel: 05-2531313 (12 lines) Fax: 05-2557950 05-2536785
KIN KHOON & CO A23 – A29 Member: Corporate Nominee: SDN BHD Jalan Dato’ Tahwil Azhar Asian Pac Holdings Bhd Abdul Molok bin Wisma Kota Emas Abu Bakar 30300 Ipoh Perak Darul Ridzuan Tel: 05-2543311(General) Fax: 05-2545567
M & A SECURITIES M & A Building Members: Corporate Nominee: SDN BHD No. 52A, Jalan Sultan Idris Shah Choo Sen Yoong 30000 Ipoh Thong Kok Yoon Perak Darul Ridzuan Insas Bhd No appointment Tel: 05-2419800 (Trading) as at 30.6.1999 Fax: 05-2551015 (Trading)
113 Kuala Lumpur Stock Exchange
KLSE Members as at 30 June 1999
MBf NORTHERN No. 71, Jalan Lim Bo Seng Member: Corporate Nominee: SECURITIES 30300 Ipoh MBf Capital Bhd Chong Sem Shoong SDN BHD Perak Darul Ridzuan Tel: 05-2548999/2552887 Fax: 05-2412716
PHILEO ALLIED Wisma Phileo Member: Corporate Nominees: SECURITIES No. 63, Persiaran Greenhill Phileo Allied Berhad Ahmad bin Abdullah SDN BHD 30450 Ipoh Din bin Mohd Hassan Perak Darul Ridzuan Tel: 05-2558233 Fax: 05-2534333 Telex: MA 44151 PPSEC
PREMIER CAPITAL Wisma Premier Capital Member: Corporate Nominees: SECURITIES No. 21 Jalan Seenivasagam Premier Capital Holdings Fung Yan Khai SDN BHD 30450 Ipoh Sdn Bhd Wong Kim Lin @ Perak Darul Ridzuan Wong Kim Ling Tel: 05-2415100 (5 lines) Fax: 05-2553903
SBB SECURITIES 51-53 Persiaran Greenhill Members: Corporate Nominees: SDN BHD 30450 Ipoh Raja Puan Sri Dato’ Perak Darul Ridzuan Noora Ashikin bt Tel: 05-2530888 (General) Raja Abdullah Fax: 05-2537666 SBB Capital Markets Lee Seang Seng Telex: MA 44150 SBBSEC Sdn Bhd Lau Yew Kong
MEMBER COMPANY PERAK DARUL RIDZUAN – TAIPING TAIPING No. 21, Jalan Stesen Members: Corporate Nominees: SECURITIES 34000 Taiping Durapark Corporation Ahmad bin Haji Ibni Hajar SDN BHD Perak Darul Ridzuan Sdn Bhd Harris bin Haji Ismail Tel: 05-8060888 (General) Muhammad Nadzri 05-8061188 (Trading) bin Hamzah Fax: 05-8060088 (General) 05-8063388 (Trading)
MEMBER COMPANY TERENGGANU DARUL IMAN FA SECURITIES 3rd Floor, Wisma UMNO Member: Corporate Nominee: SDN BHD Jalan Masjid Abidin FA Peninsular Bhd Isa bin Mustapha 20100 Kuala Terengganu Terengganu Darul Iman Tel: 09-6238128 Fax: 09-6238129
114 Annual Report 1999
PTB SECURITIES 1st, 2nd & 3rd Floor Member: Corporate Nominee: SDN BHD No. 61 Jalan Sultan Ismail PTB Securities Holdings Ismail bin Nik Man Peti Surat 151 Sdn Bhd Pejabat Pos Besar 20700 Kuala Terengganu Terengganu Darul Iman Tel: 09-6235546 09-6235532
MEMBER COMPANY SARAWAK SARAWAK Wisma Mahmud Member: Corporate Nominees: SECURITIES Jalan Sungai Sarawak CMS Capital Sdn Bhd Dato’ Haji Onn SDN BHD 93100 Kuching, Sarawak bin Mahmud Tel: 082-338000 (General) Benny Ng Wu Hong Fax: 082-338222 Shahnaz bt Abdul Majid Telex: SASEC MA 70080
UTAMA Lot 2465 Member: Corporate Nominee: SECURITIES Jalan Boulevard Utama Utama Capital Sdn Bhd Abrizah bt Dato’ Abdullah SDN BHD Boulevard Commercial Centre 98000 Miri Sarawak Tel: 085-435577 Fax: 085-435511
MEMBER COMPANY SABAH INNOSABAH 11 Equity House, Block K Members: Corporate Nominee: SECURITIES Sadong Jaya, Karamunsing Faidzan bin Hassan SDN BHD 88100 Kota Kinabalu, Sabah Kong Kok Keong Tel: 088-234090 Kretam Holdings Bhd Mohd Zahir bin Ahmad Fax: 088-234100
MEMBER COMPANY FEDERAL TERRITORY OF LABUAN LABUAN Level 2, Wisma Oceanic Members: SECURITIES Jalan OKK Awang Besar Dr. Abdul Hadi SDN BHD 87007 Wilayah Persekutuan bin Derani (Dealer’s licence Labuan YB Abdol Mulok bin suspended by the Tel: 087-410621 Awang Damit Securities Commission Fax: 087-410620 Abdul Hakim Mordani on 12 May 1998) bin Abdul Hadi
Number of Members : 110 Number of Corporate Nominees : 110 Number of Member Companies : 65 Absent Members : Sia Say Yee Zabidi bin Mohd Zain Zainuddin bin Hayati Meah
115 (30632-P) Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Twenty Third Annual General Meeting of the Exchange will be held at the KLSE Theatrette, Lower Ground Floor, Exchange Square, Bukit Kewangan, 50200 Kuala Lumpur on Saturday, 20 November 1999 at 11:30 a.m. to transact the following business:
1. To confirm the Minutes of the Twenty Second Annual General Meeting held on 28 November 1998 at 11:30 a.m.
2. To receive and consider the report of the Committee, the Income and Expenditure Accounts for the year ended 30 June 1999 and the Balance Sheet as at 30 June 1999 with Auditors’ Report thereon in respect of Kuala Lumpur Stock Exchange and Kuala Lumpur Stock Exchange Compensation Fund.
3. To consider and if thought fit, to pass the following resolution pursuant to Section 129 of the Companies Act, 1965:- “THAT Dato’ Hwang Sing Lue, who is over the age of seventy years and retiring in accordance with Section 129 of the Companies Act, 1965, be and is hereby re-appointed as a Committee Member of the Exchange and to hold office until the conclusion of the next Annual General Meeting.”
4. To elect two (2) Committee Members.
5. To elect a Deputy Chairman.
6. To elect Auditors and to authorise the Committee to fix their remuneration.
7. To transact any other business which may be properly transacted at an Annual General Meeting.
BY ORDER OF THE COMMITTEE
IZLAN IZHAB [LS No: 01843] Company Secretary
Kuala Lumpur 29 October 1999
NOTE: A. APPOINTMENT OF PROXY RE: ARTICLES OF ASSOCIATION OF THE EXCHANGE
1. ARTICLE 24.7 (a) in the case of a Voting Member, only one of its executive directors shall be entitled to attend and vote on its behalf at the general meeting and in the event such executive director is unable to attend the general meeting, the Voting Member shall, subject to Article 26.4(1), be entitled to appoint a proxy to attend and vote on behalf of the Voting Member;
(b) in the case of Non-Voting Members who are entitled to attend and vote and where the circumstances referred to in Article 4.2(2) apply, such Members are entitled to appoint proxies to attend and vote on their behalf, respectively.
2. ARTICLE 26.4(1) A Member shall not be entitled to appoint a natural person who is not a Member as its proxy.
3. ARTICLE 4.2 (1) Every Non-Voting Member shall have the right to receive any notice of and to attend and to speak at all general meetings of the Exchange.
(2) In addition to the rights conferred under Article 4.2(1) a Non-Voting Member shall also have the right to vote upon any resolution which varies or affects his rights or privileges as a Non-Voting Member under the Memorandum of Association or these Articles.
116 (30632-P) Form Of Proxy/Certificate Of Representation
We
of
being a Member of Kuala Lumpur Stock Exchange
hereby appoint
of
as our proxy/representative to vote for us and on our behalf at the Twenty Third Annual General Meeting of the Exchange to be held on Saturday, 20 November 1999 at 11:30 a.m. and at any adjournment thereof.
Made this ______day of ______1999.
Signature of Director/Attorney authorised to act on behalf of the Member
Common Seal of Member affixed in the presence of the persons authorised by the Board of Directors
EXPLANATORY NOTES A. APPOINTMENT OF PROXY RE: ARTICLES OF ASSOCIATION OF THE EXCHANGE
(1) ARTICLE 24.7 (a) in the case of a Voting Member, only one of its executive directors shall be entitled to attend and vote on its behalf at the general meeting and in the event such executive director is unable to attend the general meeting, the Voting Member shall, subject to Article 26.4(1), be entitled to appoint a proxy to attend and vote on behalf of the Voting Member;
(b) in the case of Non-Voting Members who are entitled to attend and vote and where the circumstances referred to in Article 4.2(2) apply, such Members are entitled to appoint proxies to attend and vote on their behalf, respectively.
(2) ARTICLE 26.4(1) A Member shall not be entitled to appoint a natural person who is not a Member as its proxy.
(3) ARTICLE 4.2 (1) Every Non-Voting Member shall have the right to receive any notice of and to attend and to speak at all general meetings of the Exchange.
(2) In addition to the rights conferred under Article 4.2(1) a Non-Voting Member shall also have the right to vote upon any resolution which varies or affects his rights or privileges as a Non-Voting Member under the Memorandum of Association or these Articles.
B. INSTRUMENT APPOINTING PROXY/REPRESENTATIVE TO BE DEPOSITED
The instrument appointing a proxy/representative shall be deposited at the registered office of the Exchange not less than twenty four (24) hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote.
To confirm receipt of the above by the Exchange, kindly contact: Izlan Izhab – Tel: 03-2063498 Marhani Hamzah – Tel: 03-2317327