KUALA LUMPUR: The Securities Commission (SC) has set an ambitious target to grow the Malaysian capital market by nearly 50% over the next five years under its newly unveiled Capital Market Masterplan 2026–2030 (CMP).
Chairman Datuk Mohammad Faiz Azmi expects the domestic capital market to reach RM6.3 trillion by 2030, up from RM4.3 trillion last year.
As the target was unveiled yesterday, Mohammad Faiz admitted that the Malaysian capital market in 2025 did not generate returns as high as he would have liked, even though the economic growth had surpassed expectations.
He acknowledged that while there has been growth, returns were modest and lagged behind.
“The SC has to look at investors and what they are paying for the product. Can this be cheaper? Even from a point of inclusivity, why is it only the rich buy these products?
“It needs to be widened, so if we fractionalise the products, say offer one part of a bond or a share, it might interest more people to start investing beyond the traditional way,” he opined.
To grow the capital market, Mohammad Faiz said collaboration among key stakeholders will be critical.
As a regulator, the SC will facilitate collaborations with different ministries while ensuring everyone is on the same page.
“So we have to learn how to use our convening power to get everyone (moving) in the right direction. And ultimately, it all comes back to us because we’re the ones who help fund these things,” he told reporters on the sidelines of the launch yesterday.
According to Mohammad Faiz, if the market does not grow, it will become a problem. But with the plans the SC has in place, he is confident the targets will be achieved.
“This should not be an issue. The reality is, we are the envy of many countries. We do not have heating costs, we do not need to pay vast amounts for water and food, and even fuel is relatively cheap,” he noted.
On a separate note, Mohammad Faiz said one of the biggest challenges the SC has identified is the shortfall between what micro, small and medium enterprises need and what banks are willing to provide.
“The shortfall is RM286bil. Many of them are too small and don’t have a track record, so banks don’t lend to them. This is also something we’re looking at.
“The reason is, our pool of talent comes from them. Even if just a fraction end up listing on the stock exchange, it’s already good,” he said.
He reckoned there are about 18,000 mid-tier companies at the moment. But these are not the only firms not listed on the local exchange; the SC has also identified around 150 large companies that have yet to list for various reasons.
“The biggest one is probably Sarawak Energy Bhd. We visited the premier to find out if there were plans to list, and we were told they would be doing so in two years.
“So we are going through a list of potential companies and identifying them.”
To address this, Mohammad Faiz said a proposal has been submitted to the government: companies entering the market with a certain amount of capital would be required to list after a few years.
“Many countries around the world already do that. Take Malakoff Corp Bhd
– they had to list on the Muscat Securities Market because of the requirements there. It will be fairer if we do that here – we have to continue negotiating,” he said.
The CMP, while ambitious, reflects the belief that there is room to continue improving and accelerating growth.
Mohammad Faiz said the CMP is anchored on four broad but interconnected themes – vibrancy, inclusivity, sustainability, and regional opportunities.
“We are looking to significantly increase trading activity and access for companies seeking capital.
“Over the past 10 years, our equity market has grown incrementally but lagged GDP growth, but we feel there is scope to raise the long-term valuations and performance of all our listed companies through a Value-Up initiative,” he noted.
Regarding asset classes, he added that the master plan will push for more exchange-traded funds (ETFs) in Malaysia with a distinct Asean focus, thus widening the investor base while attracting new and stickier investors from friendly countries.
“Underpinning the master plan is the Islamic Capital Market, which is not just a competitive edge but also entrusted with the responsibility to meet the expectations of the ummah in Malaysia,” he said.
