Page 27 - KLSCCCI Oct 2021 - eBulletin 402

行业聚焦

Transaction costs linked to sales of real properties

or M&A/fund raising exercise of businesses should
either be fully waived or further reduced

While we welcome the flexibilities granted under the Budget 2022, such as recent extension of stamp
duty exemption period related to qualifying loan restructuring and rescheduling agreements, more could
be done to help businesses recover. This include extending stamp duty exemption over real property sales
linked to companies (not just limited to real property sale by individuals) and extending stamp duty
exemptions on all instruments/transaction agreements to execute all types of M&A and fund raising
transactions (not just limited to P2P loan/financing transactions) to be applicable to all companies (not just
limited to SMEs approved by Ministry of Entrepreneur Development and Cooperatives). Fund raising
activities include but not limited to debt instrument/loan raising, capital raising which will enable White
Knights to extend assistance or co-invest into financial distressed companies/ groups. For example,
transaction involving sale of a subsidiary company by a financially distressed parent company in effort to
avoid bankruptcy & to save jobs is not currently granted with stamp duty exemptions.
Similarly, RPGT exemptions granted under the Budget 2022 should be applicable not only to
individuals but companies as well. Many companies have to take the painful decision to sell off
some real property assets to raise liquidity to save businesses. Thus, it is reasonable for RPGT
exemptions to be available for both individuals as well as companies.

Remove inefficiencies/hurdles within
the capital market machinery to help

Malaysian companies thrive

We noted certain areas of the capital market have taken a step back in
development. For instance, the government has revised the stamp duty structure
relating to trading of listed shares from 0.1% to 0.15% and at the same time removing
the cap of RM200. This has resulted in significant increase in transaction costs and will
likely reduce trading volume in the Malaysian stock market over the long term. While we
understand such revisions would improve tax revenue for the government by capitalizing
on the recently active stock market activities, such revisions will only yield temporary boost
in tax revenue but dampen overall market liquidity in the longer term. Sufficient market
liquidity is critical for capital markets to function well.
Instead, we favour approaches that foster conducive capital market environment. Given
SMEs comprise over 98% of total registered businesses in Malaysia and contributes about 37% of our
nation’s GDP in 2019, we believe much can be achieved to help SMEs thrive by improving the current state
of our LEAP Market framework on Bursa Malaysia. We should implement positive enhancements to the existing
LEAP Market by encouraging trading volume and higher liquidity on the LEAP Market. This could involve further
reduction of securities trading costs, removal of stamp duty on securities trading, encourage more virtual
investor presentations by LEAP-listed companies via Bursa Malaysia which is low cost and reach maximum
investor audience as well as easing of the criteria for sophisticated investors allowed for trading on LEAP
Market securities. Criteria for sophisticated investors of the LEAP Market could be revised further by reducing
an individual sophisticated investor’s gross total annual income to not less than RM180,000 in preceding 12
months or RM250,000 for an individual sophisticated investor jointly with spouse to be on par with criteria
imposed on Angel Investors on equity crowdfunding and peer-to-peer platforms.
Another key enhancement to the LEAP Market could involve developing clear guidelines for transfer
listing of LEAP Market participants to ACE Market. Listed companies on LEAP Market currently faces a
dead-end with no path to be transfer listed to ACE Market. This is in contrast to ACE listed companies where
there are clear guidelines for ACE listed companies to be transfer listed on Main Market of Bursa Malaysia.
We hope the relevant government bodies or organisations will consider our views and we are open to
participate any discussion forums that may be organised to help improve the Malaysian business environment
and capital markets.

Article by : FCM KLSCCCI
Supported by :
1. Chinese Chamber of Commerce and Industry of Kuala Lumpur and Selangor (KLSCCCI)
2. SME Association of Malaysia
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