Malaysia to Press Listed Firms on El Nino Readiness, Eyes Middle East Ties

Malaysia's Securities Commission plans to write to major publicly traded companies asking them to set out how they are preparing for El Nino, its chairman Mohammad Faiz Azmi said, amid concern that businesses may be underprepared for the weather pattern's effects.

Forecasters have warned of a possible super El Nino, which can bring prolonged heat and drought across Southeast Asia. Drier conditions can reduce crop yields and put pressure on water supplies, with Malaysia's palm oil sector particularly exposed.

"We're going to send a letter to all the major companies just to ask them: So actually, what is your El Nino plan?" Mohammad Faiz said in an interview during an investor roadshow in the UK. The regulator intends to follow up with companies next year to assess whether their preparations proved effective.

While regulators in several markets already require disclosure on climate and weather impacts, requests tied to specific events are typically not made public. Mohammad Faiz said the exercise would test whether companies' climate-risk disclosures translate into practical readiness, noting that many firms had not seriously considered how they would cope with drought because Malaysia has historically had ample water.

Separately, the commission is examining closer cooperation with regulators in the Middle East as part of efforts to strengthen Islamic finance links and draw more capital into Southeast Asia. As an initial step, regulators are studying differences in how jurisdictions classify stocks as compliant with Sharia law.

In July, the Securities Commission signed an agreement with Hong Kong's Securities and Futures Commission allowing companies pursuing dual listings to use a single prospectus and set of submission documents from this month. Mohammad Faiz said Sarawak Energy was one IPO candidate the commission was encouraging to consider such a dual listing to secure a better valuation, adding that the company could be worth around $10 billion when it eventually lists. Sarawak Energy did not respond to a request for comment outside office hours.

Asked whether AirAsia was on the regulator's surveillance watchlist, Mohammad Faiz said he could "neither confirm nor deny" it, adding that the government had hired consultants to review the carrier's finances, though he was unaware of any takeover plans. AirAsia did not respond to a request for comment. Its co-founder, Tony Fernandes, said on Friday that there had been no discussions with the government and that the airline did not need a rescue or bailout.

On the stock exchange, Mohammad Faiz said the government aims for Bursa Malaysia's market capitalisation to reach 6.3 trillion ringgit ($1.55 trillion) over five years, up from about 4.5 trillion ringgit at present.