By EN-LAI YEOH
KUALA LUMPUR, Malaysia (AP) — Malaysia’s state-linked companies will spread out and seek new investment targets in Asia as part of efforts to turn them into regional champions by 2015, the head of the government’s investment arm said.
Azman Mokhtar, managing director of Khazanah Nasional, said Telekom Malaysia and CIMB Bank would lead the regional drive.
The two companies are among 48 government-linked companies, or GLCs, listed on the stock market. The government, via Khazanah and other proxies, holds significant stakes in these corporations and many benefit from government procurement contracts.
"Both (banking and telecommunications) sectors have pretty good cashflow," Azman told reporters on the sidelines of a major investment conference in Malaysia’s largest city, Kuala Lumpur.
"The pace of liberalization is moving faster in these two sectors."
He didn’t give details but Telekom Malaysia earlier Wednesday unveiled plans to increase investment in Indonesia and India.
Malaysia’s GLCs make up a major chunk of the economy and the stock market, and are significant providers of essential services and employment.
Khazanah was tasked in 2004 with reforming GLCs to boost their competitiveness and turn around money-losing enterprises such as national carmaker Proton and flag carrier Malaysia Airlines.
In his speech earlier, Azman said the market value of top 20 listed GLCs had risen to a total 228 billion ringgit (US$ 65.5 billion; euro49.3 billion) in March, from 145 billion ringgit in May 2004, raising shareholder returns by 71 percent over that period.
The top 20 GLCs also recorded a 60 percent onyear growth in earnings in 2006, he said.
"There is clearly some way to go and the gains are not fully broad-based as yet, we are nonetheless...in fairly good shape and with a clear road map and good provision to move into the next stage," the former banker said.
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