Kuala lumpur: Bursa Malaysia Bhd's disclosure and transparency standards remain strong, and the initial public offerings (IPOs) with a free float below 25 percent have not raised material concerns for Morgan Stanley Capital International (MSCI), said chief executive officer Datuk Fad'l Mohamed.
According to BERNAMA News Agency, Fad'l emphasized that MSCI's recent actions are very Indonesia-specific and do not apply to Malaysia. He shared these insights during a media briefing to announce Bursa Malaysia's financial year 2025 (FY2025) results. Fad'l clarified that the approval of some large IPOs with a free float lower than the standard 25 percent is aligned with Bursa Malaysia's clear guidelines and regulatory framework, which accommodate such flexibility based on the market capitalisation of the issue or applicant.
Fad'l further explained that Malaysia's 25 percent minimum spread is higher and more robust, and MSCI has not indicated any review or change in how the free float will be assessed. Meanwhile, Indonesian stocks experienced a downturn after MSCI announced a pause on certain index adjustments for Indonesian companies due to ongoing concerns over tightly held ownership structures. The IDX Composite Index reflected this sentiment, slipping 1.06 percent at the close of trading.
The global index provider, MSCI, recently announced a temporary freeze on index treatment for Indonesian stocks due to persistent concerns over free float levels and overall market accessibility. Fad'l highlighted that, aside from free float, MSCI evaluates multiple investability criteria, such as liquidity, adjusted market capitalisation, and accessibility.
Fad'l assured that MSCI has not flagged any systemic free float issues for Malaysia, and a few Malaysian counters with a free float below 25 percent have not been viewed as material concerns by MSCI. He concluded by stating that they are maintaining the current standards, and the allowance for certain IPOs with a lower free float has not triggered negative commentary from MSCI on this matter.