IN ONE of his first policy speeches since the March 8 general election, Malaysian Prime Minister Abdullah Ahmad Badawi promised wide-ranging reforms and a continuation of pro-business and investment policies.

Speaking at an investors' conference yesterday, he also announced plans to combine Malaysia's main and second boards into a 'unified board', as well as a revamp of the junior Mesdaq Market to allow emerging companies greater access to capital market funds while making the mechanism more sponsor-driven.

Bond offering approvals are to be further liberalised; Malaysia will allow for a third credit rating agency, with foreign shareholders allowed up to 49 per cent equity. To enhance liquidity in the stock market, a market-making framework is in the pipeline,which could see proprietary traders in commercial and investment banks as well as foreign traders obliged to participate as market makers - but in exchange for incentives such as tax concessions and lower fees.

Mr Abdullah's address at the annual InvestMalaysia conference had been keenly awaited for signs as to how his administration intended to govern, following the political uncertainties after the massive electoral backlash on March 8 which left his ruling Barisan Nasional (BN) coalition without a two-thirds Parliamentary majority plus the loss of an unprecedented five states.

The market rallied 2.42 per cent yesterday, perhaps in part owing to the PM's assurances. But Mr Abdullah also conceded that his government had let Malaysians down after a landslide win in 2004.

'The result of the elections was a strong message that I have not moved fast enough in pushing through with the reforms that I promised to undertake,' he said. 'I thank the Malaysian people for this message. Point well made and point taken.'

He said there would be a renewed focus on battling crime and corruption, supporting judicial reforms and ensuring a fair number of places of worship for Malaysians of all religions, noting that 'these were the major issues that resonated with voters regardless of ethnicity, background, gender or age'.

Mr Abdullah reiterated his commitment to planned economic corridors - even those in the five Opposition-held states - and said he intended to have 'productive working relationships with all state governments' to ensure the corridors' success.

He said there were no plans to cancel any proposed infrastructure projects, but owing to increases in prices of raw materials, there would be some 'fine tuning' - for example, the projects might be funded by the private sector rather than be government financed.

With the country already one of the biggest markets for the issue of Islamic bonds, Malaysia's further liberalisation extends 'deemed approved' status to domestic or foreign ringgit-denominated bond offerings rated 'AAA' by domestic rating agencies or a minimum 'BBB' by international agencies.

These issues will also be exempted from trust deed and trustee requirements, and will be able to use international documentation.

The deemed approved status will also be given for non-ringgit bonds issued by local and foreign issuers but a minimum 'BBB' rating by an international agency will be required.

There was no timeframe provided for when the equity boards would be unified, but Mr Abdullah said the combined board would have uniform listing requirements, and be disclosure-based, 'with easy entry and fast removal'.

Because of the scant interest in the second board, corporate executives were of the view that it made sense to combine both exchanges. But they believe a reasonable timeframe is necessary, given the significant differences in the listing criteria and quality between the companies on the two boards.

High prices had also been a factor in the elections, with the government expected to reduce its hefty oil and gas subsidies after the polls. That is now uncertain although Mr Abdullah yesterday talked about a package of measures to help lower-income earners, 'as well as limiting the wastage and losses caused by subsidies'. But he declined to disclose details, saying an announcement would be made soon.