The Kuala Lumpur Stock Exchange (KLSE) said today it will demutualise by July next year and aim to be a listed company by the end of 2003.

Executive chairman Mohamad Azlan Hashim said the demututalisation would lead to increased efficiency, accountability and transparency in the KLSE as well as enhanced ability to raise capital to fund investments.

"Demutualisation is not the end, it is an enabler to allow KLSE to achieve new heights of success, to make it better able to contribute to the efficient and effective functioning of our capital market," he said.

Securities Commission chairman Ali Abdul Kadir said the finance ministry would hold a 30 percent stake in the demutualised exchange, local stockbroking firms 30 percent and retail dealers 10 percent.

Further discussions

The remaining 30 percent would be set aside to help establish the Capital Market Development Fund (CMDF), a statutory trust fund to facilitate the development of a competitive capital market, Ali said.

"The 30 percent allocation to CMDF will be sold entirely (to the public) as part of the IPO exercise," Ali said, adding the proceeds would be used as working capital for the fund.

Mariam Yusof, chairwoman of the Association of Stockbroking Companies, said the association had asked for a 70 percent stake in the demutualised entity but was allocated only 30 percent for its 66 members.

"We are not exactly exuberant," Mariam said, adding the proposal would be discussed by the stockbroking companies at its annual meeting on Nov 29. AFP