KUALA LUMPUR: Malaysian companies should be experimenting with the Asean market to tap into the region’s vast population of more than 620 million people, said CIMB GROUP HOLDINGS BHD chairman Datuk Seri Nazir Razak.
He also suggested a minimal tax level across Asean countries and a virtual board that lists out all the top companies in Asean, to spur investments within the region.
“We are now living in the world of fourth industrial revolution and that requires scale, that requires our own companies to experiment with the scale of Asean so that we can invest in technology,” he said on the sidelines of the “Asean roundtable series – Deepening capital markets in Asean: Opportunities and challenges’’ yesterday.
The Fourth Industrial Revolution is referred to as a fusion of technologies that builds on the third industrial revolution, that is, the digital revolution that had been occurring since the middle of the last century.
Nazir pointed out companies such as Alibaba and Tencent in China are successful, partly because of the scale of the market they are operating, which has than 1.3 billion people.
“Asean has 620 million people, but how are we going to access the economic of scale of Asean? We do it by bringing barriers of entry down between countries,” he said.
One of the barriers he highlighted was on standardising a minimal tax treatment across the Asean countries.
“For example, today, to invest in baht bonds, investors from South Korea and Singapore don’t get tax, whereas Malaysia investors do.
“Shouldn’t we have a rule where all Asean investors are subject to the minimum level of taxation that will be applied to each country,” Nazir said.
He also suggested the setting up of a virtual board that lists out the top companies in Asean especially with many domestic funds looking to diversify their portfolio overseas.
“On the board, there should be information of the stock, which exchange it is listed on and information on how these securities can be accessed by the investor, with full transparency on how to invest and eventually divest,” he said.
Meanwhile, Securities Commission Malaysia executive chairman Tan Sri Ranjit Ajit Singh said aside from information and research on companies across the region, the virtual hub should also provide information such as on taxation policies.
“Ultimately it has to be an industry-wide effort,” he said.
On a related matter, Senior partner and managing partner, Asia-Pacific banking practice McKinsey & Company Joydeep Sengupta said policymakers in this part of the world needed to quickly make critical policy decisions for long term capital market growth.
“Asean policymakers can consider introducing a series of measures to develop a liquid government debt securities market; promote the development of a deep and broad investor base for the supply of capital through pension funds and insurance companies,” he said.