PETALING JAYA: Efficient capital formation and mobilisation continue to be important drivers in strengthening the sustainability and competitiveness of the Malaysian capital market.
The Securities Commission (SC) in its 2023 Annual Report said that it will continue to undertake initiatives such as partnerships with other government agencies, introducing innovative financial products and services.
The SC will also continue integrating new players into the market ecosystem and developing relevant talent pipeline.
“The SC undertook various developmental initiatives spanning both the alternative and traditional markets.
“These initiatives are specifically geared towards facilitating greater fundraising avenues, especially for micro, small and medium enterprises (MSMEs) and mid-tier companies (MTCs) and strengthening the overall investment ecosystem,” it added.
An MoU inked between the SC and SME Corp Malaysia (SME Corp) in September last year, to spur MSME’s access to capital market financing.
The three-year collaboration between the SC and SME Corp aims to create about 200 capital market-ready MSMEs by 2026 and to familiarise about 300 MSMEs with sustainability disclosures and corporate governance best practices.
In 2023, the SC said the overall amount raised in the equity crowdfunding (ECF) and peer-to-peer financing (P2P financing) markets also grew by 29% from 2022, reaching an all-time high despite heightened economic uncertainty.
On a whole, the ECF and P2P financing markets continue to facilitate financing for more than 15,000 businesses in the country, surpassing RM6bil since inception.
Institutions, despite being a smaller segment, have invested nearly RM1.3bil into ECF and P2P financing campaigns, comprising 57% of total funds raised in 2023.
“The market also witnessed an increase in the contribution of syariah-compliant ECF and P2P financing to the total funds raised in 2023, accounting for 24% compared to 8% in 2022.
The total funds raised through syariah-compliant financing in both markets grew significantly in 2023 to RM524.8mil (2022: RM140.8mil), primarily attributed to the substantial increase in funds raised through the P2P financing market,” the SC said.
The SC added that Islamic ECF and P2P financing markets as an emerging asset class are gaining significant traction.
Moreover, the SC has allowed the registration of new P2P financing platforms to offer debt-based financing for MTCs as compared to existing P2P operators who are predominantly serving the financing needs of MSMEs.
This is in light of the fact that MTCs which have a sizeable contribution to the country’s gross domestic product have been primarily self-reliant in financing their business growth especially if they have outgrown existing financing avenues for MSMEs, but are still too small for the traditional public market.
“The new registration has attracted positive interests from potential market operators, with one new P2P-MTC operator being registered by the SC,” the regulator noted.
