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No more 30% Bumiputera equity rule in 27 services sub sectors… The Government removed the 30% Bumiputera equity requirement for the 27 services sub-sectors (see table in last page for details) with immediate effect in line with the ASEAN trade liberalisation and efforts to boost the services sector. Long overdue move... The decision came as no surprise and was somewhat long overdue as the liberalization of the non-financial services sector was mentioned in the first and second economic stimulus packages, but minus the details until yesterday’s announcement. In addition, it reflects the Government’s effort to address the long-standing issue of the New Economic Policy (NEP). … and logical next step in the country’s development i.e. further promote services sector as source of growth, output, employment and investment… Long-term trends show the growing importance of the services sector in the economy as summarized in the table below. We liken this liberalization of services sector to the opening up of the manufacturing sector in the late 80s that catalysed Malaysia’s industrialization from a commodity-based economy. A long-term positive, but not market moving. We do not believe this liberalization offers a direct advantage to any of the listed companies we cover. However, should it attract meaningful foreign investment, the new firms may intensify competition for existing players in these service sectors. Importantly, this liberalisation puts the new administration in a positive light with investors, as the Bumiputera equity ruling has been viewed as a sacred cow by locals but an obstacle by potential investors.