Keynote Address
YBhg Datuk Ranjit Ajit Singh
Chairman, Securities Commission Malaysia
The Malaysia Investor Relations Awards 2012
Wednesday, 6th June 2012
– Levelling the Information Playing Field –


YBhg Dato’ Tajuddin Atan, CEO Bursa Malaysia

Ms. Audrey Ho the Chairman of the Malaysian Investor Relations Association (MIRA)

Members of the Board of MIRA

Distinguished Guests

Members of the Media

Ladies & Gentlemen


Good afternoon,


I would like to thank the Malaysian Investor Relations Association (“MIRA”) for inviting me to deliver the keynote address at its 2nd Malaysia Investor Relations Awards. It is indeed encouraging to see the efforts that MIRA has put in to demonstrate commitment to fostering best practices and enhancing ethical and professional standards in the investor relations arena and in particular, its focus on good governance, transparency and enhancing shareholder value. I congratulate those of you here who will be receiving awards in the various categories.


MIRA as the Industry Association has a key role to play in developing and setting best practices of the IR industry. As Malaysia’s capital market evolves into a fully developed status, it is crucial for industry associations such as MIRA to raise the bar of professionalism in the corporate sphere. Forums such as this provide an opportunity for exchange of views and experiences in the field of IR and governance practices. MIRA’s efforts to raise awareness of these through these awards are commendable. I look forward to seeing a continued deepening of the scope and findings of this survey in the future years.


The relationship between investor relations, governance, sustainable business, and long-term strategic considerations are increasingly important factors affecting investment decisions worldwide. You only have to look at what happened in the financial and economic crisis in US and which periodically appear globally to see the effects of information asymmetry impacting on investor behaviour and sentiments.


Corporate disclosure is critical to the functioning of an efficient capital market. Financial reporting and disclosures are important means for companies to communicate their performance and prospects to investors. Crises in markets inevitably demonstrate that investors were disadvantaged because of the scope and quality of information they were given and the impact of this information asymmetry on investor behaviour.


I would like to take this opportunity this afternoon to talk about these issues, which are so critical to our capital market.

Ladies and gentlemen,


Investor relations is not just a means for companies to communicate information on their business and corporate strategy. The communication lines must work both ways, enabling companies to have a finger on the pulse of the market and get quality feedback and intelligence on what are investors’ expectations of the company. Quality of disclosures, ease and fairness of access to information in engaging with stakeholders are imperatives in any such investor relations program.


Companies that commit to providing stakeholders with quality information which builds a sound understanding of the company and its strategies, will find they will benefit from the trust it builds with their stakeholders. This will promote a loyal base – with stakeholders who are more willing to stay for the long haul, giving the company the ability to approach its capital management exercises with less trepidation.


The continued growth of our capital market and the increasing complexity of businesses make it imperative to arm investors with meaningful disclosures to make informed investment decisions. Anything less than this gives rise to concern and will, in addition to more intense regulatory scrutiny, invite the kind of fall-out that invariably accompanies bad stakeholder management in terms of investment decisions by investors, the company’s reputation and marketability. There is therefore a clear need to continue to work together to level the playing field for investors especially in respect of information asymmetry.


Information asymmetry occurs when one party possesses more information or better information than the other which creates an imbalance of power that may impact on a person’s ability to make an informed investment decision. Information asymmetry in the capital market can take many forms. These include selective disclosure practices and inadequate disclosure to investors.


Recently, global regulators have directed their efforts and focus to the widespread practice of private engagements between companies, brokers, analysts and their “prized investors”. The risk to avoid is the sharing of information of a non-public material nature that could lead to market abuse. In the US these practices have come under close scrutiny. Privileged access or differential treatment of this nature has the effect of depriving investors particularly retail investors of the complete picture thereby disadvantaging the investor’s ability to make an informed investment decision.


The SC on its part would prefer not to introduce more rules or regulations, and would rather see companies widening access to information to all stakeholders by observing transparent practices and transmitting complete, meaningful and timely disclosure of information. Of course the SC will closely scrutinise these practices and disclosures and make it a priority to level the playing field by ensuring that investors have easy and timely access to information.


There must also be a change in mindset to how companies disclose information to the investing public. Boards, CEOs and CFOs are central to this process, and can lead change in their companies. Boards and their advisers are expected to exercise care and diligence when making disclosures to the investing public. The disclosures made should not contribute to confusion to the market – rather provide the marketplace with the necessary clarity on the company’s business and financials. They must move quickly to dispel any misinformation arising from rumours and speculation.


Boards and key management must proactively ensure that companies comply not only with the black letter of the law but also the substance of the principles that are underlying good disclosure. This simply means, investors must have access not just to sufficient information – but information which is adequate, relevant and timely.


Good disclosure is not only dependent on the boards or key management of the company but includes the participation of other stakeholders, such as analysts and the media. The media in particular is an important medium of information for the company to disseminate information to the investing public. Companies should engage and keep these stakeholders informed to ensure information disseminated to the investing public is accurate and allows for informed decision-making.


Quality of disclosures made to the public also depends on the role played by the stock exchange. The Stock Exchange serves as an important conduit for communicating material information to the investing public. The Exchange being a front line regulator assesses the quality of corporate disclosures made and queries inadequate disclosures. Companies must use this conduit and ensure that their continuous disclosure obligation to the exchange is fulfilled and that there is information dissemination that is both accurate and timely.


As regulators, we will continue to strive to create a better environment for disclosure, but equally important is the change of mindset. Boards and key management can in their own capacity effect change without waiting for regulatory intervention. Investors as shareholders and owners can also play their part by exercising their right to demand high quality disclosures from their companies.


Responsible share ownership is a key theme that is covered by the Malaysian Code on Corporate Governance 2012. To encourage responsible share ownership, the Code places importance on companies making public the rights of shareholders to enable them to exercise their voting rights in an informed manner. These efforts are intended to facilitate shareholders playing a more proactive role in exerting market discipline on the companies and more informed decision-making.


Ladies and gentlemen,


In conclusion industry associations such as MIRA are in a unique position to contribute towards these aims and their efforts at embedding good investor relations practices into the DNA of companies and their boards is a commendable effort.


I would like to once again, thank MIRA for giving me the opportunity to share some of my thoughts on the importance and relevance of investor relations. I also congratulate the award recipients for stepping up to the plate and committing to investor relations as an on-going responsibility to engage, educate, inform and update the investment community. I look forward to seeing this commitment reflected by all players in the governance practices of companies and the quality and timeliness of disclosures to the market as a whole, therefore levelling the playing field for investors.

Thank you for your kind attention.