Malaysia opens up finance sector, allows 70% foreign stake

Malaysia today said it will allow foreigners to own a majority stake in all financial institutions in the country except commercial banks, raising the cap from the current 49 per cent.      
The move is part of a gradual liberalisation initiated by Prime Minister Najib Tun Razak.       
Najib, who is also the finance minister, told reporters here that he is raising the foreign ownership cap in insurance companies and investment banks.       
Foreigner's will now be allowed to own up to 70 per cent equity in all financial institutions except commercial banks, up from the current 49 per cent, he said.       
"Nine new bank and insurance licences will also be issued to world-class players in the financial sector from 2009-2011," Razak said.       
He said the foreign equity in commercial banks would remain at 30 per cent.       
"These liberalisation measures are in line with the government's initiatives to promote structural change within the economy and diversify sources of growth to further drive economic expansion," said Najib.       
Last week the government lifted the 30 per cent condition on equity fixed for 'bumiputra' or local Malays on 27 services sub-sectors.       Currently, there are 13 locally incorporated commercial banks, including Citibank, Standard Chartered and HSBC.