Friday, January 05, 2007
Top banker calls for a review of the NEP
It came as a surprise today when I read Nazir Abdul Razak, the chief executive officer of CIMB Group and more importantly, the brother of the Deputy Prime Minister calling for the National Economic Policy to be reviewed, in order to make the country more competitive. Apparently, he made this call in an article he wrote for the Edge. He did not reject the policy but rather said it is time for the divisive policy to remoulded to fit the changing times. But being the banker he is, he seems to be more concerned about the damage the NEP is doing to the country's equity markets rather than what this policy is doing in accentuating racial suspicions.
He writes: "In our little corner, in the capital markets, for instance, if we have moved to free pricing for IPOs (initial public offerings), how dangerous is that we insist that bumiputeras have preferential allocation? Potential issuers today are being courted by exchanges throughout the world; in its present form, the NEP discourages companies from listing on Bursa Malaysia; how helpful is that to the country or indeed the bumiputera community?”
Interestingly enough, Nazir's brother, the Deputy Prime Minister Najib Tun Razak has always come out in no uncertain terms to lambast all calls for a review of the NEP. Hardly surprising as the DPM has to play to the Malay gallery. But the fact that Nazir comes out in an article calling for a revamp of this policy, means that he would have gotten the greenlight from Najib to do so. Perhaps it is an act of shaking the tree a little bit, to see how might the fruits fall. Political observers will be perking up now, to see what this might mean for the Abdullah-Najib rivalry in 2007. It will also be interesting to see how the Abdullah, the Prime Minister, or indeed his son-in-law Khairy Jamaluddin, reacts to media queries on this subject
Why did Nazir make this statement? Is it is to appeal to investors - both local (read Chinese) and foreign - that are disappointed with the Prime Minister's inability to make changes to the current NEP policy which is fast becoming a liability? Is it a message to them that Najib will do things differently and make the country more competitive? I for one, do feel that this article may be just one of Najib's long term plan to unseat the sleeping Prime Minister. ¶ 8:46 PM
He writes: "In our little corner, in the capital markets, for instance, if we have moved to free pricing for IPOs (initial public offerings), how dangerous is that we insist that bumiputeras have preferential allocation? Potential issuers today are being courted by exchanges throughout the world; in its present form, the NEP discourages companies from listing on Bursa Malaysia; how helpful is that to the country or indeed the bumiputera community?”
Interestingly enough, Nazir's brother, the Deputy Prime Minister Najib Tun Razak has always come out in no uncertain terms to lambast all calls for a review of the NEP. Hardly surprising as the DPM has to play to the Malay gallery. But the fact that Nazir comes out in an article calling for a revamp of this policy, means that he would have gotten the greenlight from Najib to do so. Perhaps it is an act of shaking the tree a little bit, to see how might the fruits fall. Political observers will be perking up now, to see what this might mean for the Abdullah-Najib rivalry in 2007. It will also be interesting to see how the Abdullah, the Prime Minister, or indeed his son-in-law Khairy Jamaluddin, reacts to media queries on this subject
Why did Nazir make this statement? Is it is to appeal to investors - both local (read Chinese) and foreign - that are disappointed with the Prime Minister's inability to make changes to the current NEP policy which is fast becoming a liability? Is it a message to them that Najib will do things differently and make the country more competitive? I for one, do feel that this article may be just one of Najib's long term plan to unseat the sleeping Prime Minister. ¶ 8:46 PM
