Bursa Malaysia: Disclosure Standards Strong, Low Free-float IPOs Clear Of MSCI Concerns

KUALA LUMPUR, Jan 29 (Bernama) -- Bursa Malaysia Bhd’s disclosure and transparency standards remain strong, and the initial public offerings (IPOs) with a free float below 25 per cent have not raised material concerns for Morgan Stanley Capital International (MSCI), said chief executive officer Datuk Fad’l Mohamed.

“MSCI's recent action is very Indonesia-specific. From the information that we have, I think there is no similar concern for it to apply to Malaysia," he told a media briefing to announce Bursa Malaysia’s financial year 2025 (FY2025) results here, today. 

Commenting on the approval of some large IPOs with a free float lower than the standard 25 per cent, Fad’l said Bursa Malaysia has clear guidelines and a regulatory framework that allow such flexibility, depending on the market capitalisation of that specific issue or applicant.

"So I think that is the way we look at it...that Malaysia's 25 per cent minimum spread is higher and more robust.

"Clearly, MSCI has not indicated any review or change in how the free float will be assessed," he said.

Yesterday, Jakarta stocks dropped after MSCI announced a pause on certain index adjustments for Indonesian companies due to unresolved concerns over tightly held ownership structures.

The Indonesian stocks were also lower at the close of trading today, with the IDX Composite Index slipping 1.06 per cent.

In its latest announcement, the global index provider said that it would temporarily freeze index treatment for Indonesian stocks amid persistent concerns over free float levels and overall market accessibility.

Fad’l said apart from free float, MSCI evaluates multiple types of investability criteria, such as liquidity, adjusted market capitalisation as well as accessibility. 

"MSCI has not flagged any systemic free float issues for Malaysia, and a few Malaysian counters (with a free float) below 25 per cent have not been viewed as material concerns by MSCI.

“I think for now, I can only say that we are maintaining what we have currently, and the allowance for certain IPOs (with lower) free float have not triggered negative commentary from MSCI on this matter,” he added.

-- BERNAMA