Bursa Malaysia’s CEO says the exchange’s trading velocity, or the rate at which stocks change hands, is too low: From a high of 60-65% during the boom time of the 1990s, trading velocity is now around 34% and was down around 31% earlier this year — one of the lowest in the region.

CEO Yusli Mohamed Yusoff believes Bursa Malaysia’s 960 listed companies, including major ones, aren’t doing enough to promote or raise public interest in their shares. He says the majority of companies do not engage in any kind of investor relations activities and many don’t talk to analysts. Fund managers have apparently complained they see few Malaysian companies exhibiting at investment roadshows, with Chinese, Korean, Indian companies more visible. Recently, Indonesian and Thai companies have begun to grab their attention.

Bursa Malaysia’s own net profits are affected by low velocity. Its RM55.5 million (US$17.9 million) for the first half of 2010 was lower than expected.

Yusil wants to see companies, including those in the Petronas Group, promote their shares overseas and improve investor relations, as well as freeing up more shares for trading on the market. If companies “buck up” then Bursa Malaysia can achieve 60% velocity again within five years, he said. If they didn’t, then he’d probably rather not have them listed on the market at all.

source & article: Business Times