KUALA LUMPUR: The string of new leadership appointments in government-linked companies (GLCs) since last year, which will continue to set the tone for this year, has placed some of these firms in better light, said experts.
They said more changes could be expected to boost governance and the roles of chairmen and chief executive officers (CEOs), which, in turn, will boost market sentiment.
Last year saw leadership changes at more than a dozen government-linked corporations and key agencies, including Khazanah Nasional Bhd, Telekom Malaysia Bhd, FGV Holdings Bhd, Tabung Haji, MRT Corp, Permodalan Nasional Bhd and Petronas.
There has been strong market talk that another round of restructuring is expected to commence among top brass and senior management in GLCs this year.
Last week saw the first board appointment among GLCs this year, with former judge Tan Sri Zainun Ali appointed as Malaysia Airports Holdings Bhd (MAHB) non-independent non-executive chairman effective Jan 18.
FGV Holdings chairman Datuk Azhar Abdul Hamid began 2019 with an unprecedented letter to shareholders, detailing the issues facing the plantation group uncovered since he took over, as well as the proposed solutions to get the firm back on track.
With market sentiments around the world turning positive, these two stocks were the obvious selections for fund inflows last week.
MAHB rose 0.62 per cent a day after the new chairman appointment took place while FGV has risen more than 16 per cent since the letter came out on Jan 14.
“The market is reacting positively,” Malaysian Association of Technical Analysts adviser Nazarry Rosli told NST Business.
Nazarry said governance and transparency were key in ensuring positive public perception and market sentiment.
“I believe the performance of GLC shares will improve significantly in 2019 with the changes.
“However, future appointments, if there are more, must be done fairly and in a transparent manner.
“Dynamics are changing with GLCs.
“This year should show GLCs in a better light,” Asian Strategy & Leadership Institute (Asli) Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam said.
He said GLC leaders, especially chairmen, would have a bigger role and lead more now.
Putra Business School business development manager Associate Professor Dr Ahmed Razman Abdul Latiff expects future appointments of new corporate leaders to improve governance.
“This is important to regain stakeholders’ confidence and trust.
“As long as the government keeps its promise of no political interference in GLCs, I am confident the share market performance will improve.”