Equity Ownership in the Corporate Sector: Methodology

The following is a statement by Minister in the Prime Minister's Department Datuk Seri Effendi Norwawi:

I. Sources of Data

The following data sources were used to estimate equity ownership in Malaysia:

i. Records from the annual reports of companies registered with the Companies Commission of Malaysia (CCM);
ii. Equity ownership of public listed companies in Bursa Malaysia Berhad;
iii. Data from Bumiputera institutions such as Lembaga Tabung Haji, Lembaga Tabung Angkatan Tentera and Cooperatives Development Department;
iv. Data from Permodalan Nasional Berhad (PNB), MARA and all SEDCs;
v. Data from Securities Commission on Unit Trust Funds and related trust fund management companies such as PNB; and
vi. Information on ownership in nominee companies based on a survey done in March 2005.

II. Corporate Equity Ownership as at 31st December 2004 (Ref: Ninth Malaysia Plan, Chapter 16, Page 336).

From the above, overall Bumiputera equity ownership as of 31st December is 18.9%.



Calculation of Corporate Equity Ownership by Ethnic Groups based on Companies Commission of Malaysia (CCM)'s Database

· The main source of data to calculate equity ownership is derived from CCM. Among the information used from the annual reports of the companies in this methodology include type of companies and their activities, composition of equity ownership by ethnic groups and nationality.

· As at 31st December 2004, a total of 609,595 active companies were registered with CCM. Equity ownership by ethnic group was calculated based on the latest annual reports submitted by the companies to CCM.

· Only 40 percent of the registered companies submitted their annual returns by the dateline for the Ninth Malaysia Plam (30th June 2005). However, the total value of equity owned by this group of companies (40 percent of the registered companies) comprised 70 percent of the total equity ownership of all companies registered with CCM in 2004. The estimate for the remaining 60 percent of the registered companies was derived from their 2003 annual reports. Breakdown of shareholdings for companies which submitted their annual reports before 2004 and in 2004 are as follows:



III. Par Value vs Market Capitalization

· In calculating the equity ownership, par value was used as it provides a constant measurement to all companies in the corporate sector as compared to the market value, which can only be used on the listed companies.

IV. Equity Ownership by Trust Agencies

· The data on equity ownership in companies held by trust agencies was obtained directly from the agencies such as PNB, Perbadanan Usahawan Nasional Berhad (PUNB), Perbadanan Nasional Berhad (PNS), MARA and SEDCs.
· These agencies were established, amongst others, to assist Bumiputera participation in trade and industry. Breakdown for Bumiputera agencies are as follows:



VI. Equity Ownership by Bumiputera Institutions

· Institutions such as Lembaga Tabung Haji (LTH), LTAT, Koperasi Polis and thrust funds such as Amanah Saham Nasional (ASN) and Amanah Saham Bumiputera (ASB) were established to mobilise savings held by Bumiputera.

· The equity ownership in this category was obtained directly from the institutions involved. Breakdown for Bumiputera institutions are as follows:



Note: Equity own by non-Bumiputera in PNB Unit Trust Scheme, ASM Mara Unit Trust and Cooperatives Development Department are as follows:

Chinese RM 697.5 million
Indian RM 76.7 million
Others RM 8.6 million

VII. Equity Ownership by Nominee Companies

· Nominee companies owned RM139,472.4 million or 25.9 percent of the total corporate equity in 2004. In March 2005, EPU with the cooperation of SSM conducted a survey on 359 nominee companies to ascertain the status of ownership and beneficiaries of shares registered under nominees.


· A total of 179 companies that responded to this survey, owned RM103,713.2 million or 74.3 percent of the total equity held by nominee companies in 2004.

· The composition of equity in the nominee companies by ethnic groups and others is as follows:




VIII. Equity Ownership by the Government

· The major portion of the government equity ownership is in the public listed government-linked-companies (GLCs). Equity held by Employees' Providence Fund (KWSP), Khazanah Holdings and Minister of Finance Inc was considered as government interest. Shares held by the Government were excluded from the calculation. However, equity held by private companies and individuals in non-listed and listed GLCs such as Petronas, Telekom Malaysia Berhad, TNB and MAS was included in the calculation of equity held by the respective ethnic groups. This approach has been consistently used in all plan documents.


IX. Equity of Listed Companies

· The committee in EPU also calculated equity ownership in listed companies by ethnic group. Based on the calculation, as at December 2005, Bumiputera owned 21.8% or RM44.0 billion of the share capital in Bursa Malaysia Berhad. This figure is different from an earlier quoted figure of 36.64%. In estimating Bumiputera equity, the 36.64%, quoted as Bumiputera shares, included a large portion of shares held by nominee companies and the government.