Vibrant capital market in the works


PETALING JAYA: The Securities Commission (SC) has launched its third Capital Market Masterplan (CMP3) to empower all Malaysians to invest for their future and promote digital inclusion to reflect the rapidly changing and competitive environment.

The regulator’s masterplan will serve as a strategic framework for the growth of Malaysia’s capital market over the next five years.

Chairman Datuk Syed Zaid Albar said the progress in the capital market can no longer be measured solely by growth and size, as it also has to serve the underlying needs and aspirations of the country and its people.

“Malaysia is at a critical juncture in our post-pandemic journey. It is imperative for the capital market to continue to support the economy as we transition into an inclusive and sustainable nation,” he said at the launch of the CMP3 yesterday.

He said the previous CMP1 (2001-2010) and CMP2 (2011-2020) had expanded the capital market while ensuring market stability and integrity over the last two decades.

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The new masterplan will further strengthen the Malaysian capital market to accelerate economic growth that is sustainable and inclusive, Syed Zaid added.

Also present at the launch was Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, who said that the capital market plays an important role as one of the key enablers for structural reforms of the economy.

“It will also pave the way for the wider population to participate in the nation’s growth by enabling more inclusive and accessible investment products and distribution channels.”Tengku Zafrul said for the decade to 2020, the Malaysian capital market grew by a compounded annual growth rate (CAGR) of 5.3% to RM3.4 trillion, underpinned by continuous fundraising activity in the equities and bond market.

Moving forward, he pointed out another important pillar of the capital market is how the financial ecosystem mobilises capital to early and growth-stage firms.

“Public-private partnerships (PPP), such as co-investment structures, will expand and contribute to the development of our venture capital (VC) and private equity (PE) segments,” he said.

Using Dana Penjana Nasional as an example of a PPP partnership, Zafrul explained the agency has invested in another technology unicorn Xendit, following its successful investment in Carsome.

SC chairman Datuk Syed Zaid AlbarSC chairman Datuk Syed Zaid Albar

Dana Penjana Nasional programme is a matching fund-of-funds plan under Malaysia’s Short-Term Economic Recovery Plan.

Among the highlights of the CMP3 include a review of the SC’s framework for special purpose acquisition companies, or SPACs, amid a surge in demand for such fundraising vehicles globally.

This came just a week after Singapore and Hong Kong introduced rules for SPACs to list in their exchanges.

Malaysia was among the first in the region to introduce SPACs listings back in 2011.

The revision is timely especially with more technology companies in Southeast Asia opting for a listing in the US.

Grab, Gojek and e-commerce firm Bukalapak are targets for SPACs.

Then there is Carsome, as well as AirAsia Group Bhd that is looking at the possibility of listing its airasia Digital in the U.S.

MIDF Research head Imran Yassin YusofMIDF Research head Imran Yassin Yusof

MIDF Research head Imran Yassin Yusof said one of the key areas of the CMP3 is the need to develop early-stage investing such as angel investors and venture capital (VC) to create an ecosystem that is driven by entrepreneurship and innovation.

“We believe this is very important as a vibrant and robust early-stage investing environment will drive the creation of more innovators and disruptors in Malaysia.

“This will also allow for innovative companies to remain in Malaysia as they will have access to the critical funding needed to develop their products and services, rather than move their base of operations to another country,” he told StarBiz.

Rakuten Trade Sdn Bhd head of equity sales Vincent LauRakuten Trade Sdn Bhd head of equity sales Vincent Lau

Rakuten Trade Sdn Bhd head of equity sales Vincent Lau said the revision to the SPACs framework is timely especially with the increasing numbers of technology startups that are ready to go public.

“It is a transformation to our market to capture the fast-growing technology companies,” he told Starbiz

“The master plan also highlighted a plan to offer financing options for mid-tier companies that would accelerate growth and deepened our market,” he added.

PwC Malaysia managing partner Soo Hoo Khoon Yean PwC Malaysia managing partner Soo Hoo Khoon Yean

PwC Malaysia managing partner Soo Hoo Khoon Yean said the CMP3 is comprehensive and covers all angles including regulatory framework, growth and enhancing participation.

“A successful capital market is measured through its capability to retain the current locally-sourced funds and have the capability to attract external funds,” he said.

Towards this end, he said Malaysia’s competitive advantage is its dynamic Islamic capital market, which is more advanced compared to the region.

“We already have a comprehensive Islamic capital market, CMP3 would future proof it, and adding the ESG values would further enhance our market competitiveness,” he said.

Imran described the launch of CMP3 as timely especially with the country’s economy in the recovery path.

“Although we are not downplaying the negative effect of the Covid-19 pandemic, we believe it does present an opportunity for the country to re-examine and reform its economic structure to ensure that we remain competitive for the foreseeable future.

“The capital market will play a key supporting role in providing resources to achieve this aim,” he added.

Zafrul said that moving forward, in achieving more domestic and foreign investments, it is important to instill greater confidence in the capital market.

“In this respect, improvements in corporate governance standards will continue to shape the integrity of our corporations.

“This includes the emphasis towards greater accountability to stakeholders that goes beyond short-term profitability,” he said during his speech.

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