Evaluating the performance of privatised government companies after privatised and after listed on the Kuala Lumpur Stock Exchange

Privatisation program has been expanding throughout the world. The Government role in implementing this program is cannot be denied. Privatisation has been known as one of the way for the Government to eliminate monopolies, increase efficiency and lower prices to the consumers. It is based on the realisation that Governments only function is to govern and not to engaged in profit-making enterprises. Malaysia has initiated the privatisation program in March 1983 in conjunction with Malaysia Incorporated policy which aims to increase not only the level of cooperation between the Government and the private sector but at the same time to maintain the economic growth. Privatisation has expanded the Malaysian capital market whereby 11 out of the 15 privatised companies listed on the KLSE have achieved the RM1 billion market capitalisation and the 15 companies represent 22% of total market capitalisation of RM535.6 billion of the KLSE. This project paper is emphasizing on the performance of 2 privatised government companies; Syarikat Telekom Malaysia Berhad (STMB) and Tenaga Nasional Berhad (TNB). The performance of these 2 privatised government companies are evaluated after the companies are privatised and after it has been listed on the KLSE until the year 1994. In conducting the evaluation of the financial performance, ratio analysis will be used as the tools to determine its performance. The ratios used to determine its performance are liquidity, profitability, leverage and activity ratios.