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.

1. Equity Research
PP11072/03/2010 (023549)
Economics 23 April 2009
Services Sector
Liberalisation Removal of 30% Bumiputera rule…
No more 30% Bumiputera equity rule in 27 services sub sectors…
Suhaimi Ilias The Government removed the 30% Bumiputera equity requirement for
Suhaimi_ilias@maybank-ib.com the 27 services sub-sectors (see table in last page for details) with
(603) 2297 8682 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.
Growing Importance of Services Sector to the Malaysian Economy
1970 1980 1990 2000 2008
Real GDP (% Share) 38.3 42.5 46.8 49.3 54.9
Employment (% Share) NA 45.1 47.2 51.3 58.8
1970s 1980s 1990s 2000-2008
Output Growth (% p.a.) 9.0 7.1 9.1 6.5
• RM50.1b of investments in the services sector was
Others
approved in 2008, with FDI accounting for 11% of the
total.
• RM102.1b exports of services in 2008 while imported
services amounted to RM99.8bn, sustaining the first
services trade surplus recorded in 2007.
• According to WTO, Malaysia is among the 30 leading
global exporters of services
Source: BNM, Department of Statistics, Media Reports

2. Services Sector Liberalisation
Expect further announcements on services sector liberalization,
especially in banking/finance and related legal services… We
understand that Bank Negara Malaysia (BNM) will also make some
announcements on the liberalization of the financial services sector
early next week, which could include the following:
• Granting one or two more new licenses for foreign banks, possibly
in the non-commercial banking areas like micro-finance or
development finance. This is in line with the central bank’s
“managed and sequenced” approach as opposed to the “Big-Bang”
approach in banking sector liberalization to fit in with the national
development agenda.
• More aggressive liberalization measures for Islamic
banking/finance to strengthen the international dimension of Islamic
finance, especially in terms of product offerings, in line with the
Malaysia as Islamic Financial Centre (MIFC) agenda.
With regards to MIFC above, the legal profession will also be liberalised
to allow up to five top international law firms with expertise in
international Islamic finance to practise in Malaysia. However, these
firms will only be allowed to offer legal services in international Islamic
finance.
Other key takeaways and initiatives mentioned during the
announcement include:
• To facilitate investments, a national committee for approval of
investments has been created under MIDA to act as the focal point
to receive and process investment applications in the services
sector excluding financial services, air travel, utilities, economic
development corridors, Multimedia Super Corridor (MSC) and
Bionexus status companies and distributive trade.
• The RM100m development fund established under the First
Economic Stimulus will be mobilized to support the local services
industry in capacity building and exports. The fund will be run by
Malaysian Industrial Development Authority (MIDA), while Malaysia
External Trade Development Corporation (MATRADE) is tasked to
coordinate and spearhead all export promotion initiatives.
23 April 2009 Page 2 of 4

3. Services Sector Liberalisation
Malaysia: Liberalised Services Sub-Sectors
Sub-Sectors Activities
• Consultancy services related to installation of computer hardware
Computer & Related Services
• Software implementation services – systems and software consulting services; systems
analysis services; systems design services; programming services and systems
maintenance services
• Data processing services – input preparation servies; data processing and tabulation
services; time sharing servies and other data processing services
• Database services
• Maintenance and repair services of computers
• Other services – data preparation services; training services; data recovery services; and
development of creative content
• All veterinary services
Health & Social Services
• Welfare services delivered through residential institutions to old person and the handicapped
• Welfare services delivered through residential institutions to children
• Child day-care services including day-care services for the handicapped
• Vocational rehabilitation services for the handicapped
• Theme park
Tourism Services
• Convention and exhibition centre
• Travel agencies and tour operators services (for inbound travel only)
• Hotel and restaurant services (for 4 and 5 star hotels only)
• Food serving services (for 4 and 5 star hotels only)
• Beverage serving services for consumption on the services (for 4 and 5 star hotels only)
• Class C freight transportation (Private carrier license – to transport own goods)
Transport Services
• Sporting services (promotion and organization services
Sporting & Other Recreational Services
• Regional distribution centre
Business Services
• International procurement centre
• Technical testing and analysis services – composition and purity testing and analysis
services, testing and analysis services of physical properties, testing and analysis services
of integrated mechanical and electrical systems and technical inspection services
• Management consulting services – general, financial (excluding business tax), marketing,
human resources production and public relations services
• Rental/leasing services of ships that excludes cabotage and offshore trades
Rental/Leasing Services Without Operators
• Rental of cargo vessels without crew (Bareboat Charter) for international shipping
• Maritime agency services
Supporting & Auxiliary Transport Services
• Vessel salvage and refloating services
Source: Media Reports
23 April 2009 Page 3 of 4

4. Services Sector Liberalisation
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
STRONG BUY Total return is expected to exceed 20% in the next 12 months; high conviction call
BUY Total return is expected to be above 10% in the next 12 months
HOLD Total return is expected to be between above 0% to 10% in the next 12 months
FULLY VALUED Total return is expected to be between -10% and 0% in the next 12 months
SELL Total return is expected to be below -10% in the next 12 months
TRADING BUY Total return is expected to be between 10-20% in the next 6 months arising from positive newsflow e.g. mergers and
acquisition, corporate restructuring, and potential of obtaining new projects. However, the upside may or may not be
sustainable
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The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
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Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings
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DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds
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EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year
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23 April 2009 Page 4 of 4