Malaysia frees up share ownership

The Malaysian economy is expected to shrink by up to 5% this year

The Malaysian government has again reduced restrictions on the ownership of listed companies as it tries to boost investment in the economy.

Prime Minister Najib Razak announced that listed companies would no longer have to sell at least 30% of their shares to ethnic Malays.

He said the rules had not been helping poor Malays and were unsustainable.

Instead, listed firms will have to sell 25% of shares to the general public, of which half will be reserved for Malays.

Strategic industries such as telecoms, water and energy companies will still have to be 30%-owned by members of the ethnic majority.

'Bold measures'

The Malaysian economy is expected to shrink by up to 5% this year.

"The world is changing quickly and we must be ready to change with it or risk being left behind," the prime minister told an investment conference.

"It is not a time for sentiment or half measures but to renew our courage and pragmatism to take the necessary bold measures to advance the national interests for the long term benefit of all Malaysians."

Earlier in the year, Malaysia relaxed its ownership rules for foreign ownership of investment banks and insurance companies.

Foreign firms have been allowed to increase their stakes from 49% to 70%, although they are still only allowed to own 30% of a commercial bank.