PETALING JAYA: Malaysia’s drive to attract higher-quality investments will be bolstered by deeper access to international capital, with the country looking to leverage on Hong Kong’s financial markets to help fund high-value industries and major infrastructure projects under a new phase of bilateral capital market cooperation.
Treasury secretary-general Tan Sri Johan Mahmood Merican said stronger capital market connectivity would support Malaysia’s economic ambitions, while separately noting that the government is taking a more selective approach to investment incentives after having “perhaps overdid the red carpet” for data centres.
“In the electronics sector, we are trying to move beyond our traditional role in manufacturing and assembly towards higher-value design.
“One of our recent listings was SkyeChip Bhd, an intergrated circuit design company that reflects the ambition and transition of the Malaysian economy.
“With more high-tech, high-growth and high-value companies, gaining access to Hong Kong’s capital markets is an important gateway, particularly for the sort of companies that we want to grow in Malaysia.
“We have big ambitions in the energy and electricity space and one of it is the Asean Power Grid, involving large, billion-ringgit infrastructure projects, which will benefit from the deepening of capital market collaboration to support that growth,” he said during a fireside chat that took place at the memorandum of understanding (MoU) signing ceremony between the Securities Commission (SC) and Hong Kong’s Securities and Futures Commission (SFC).
On investment incentives, Johan said the government realised its previous approach had been “overly simplistic”, with broad-based incentives often focused on attracting large capital investments.
“In data centres, for example, we realise that if we just provide incentives based on large capital expenditure, it may not be completely aligned with our national objectives, given that the vanilla data centre does not necessarily offer much employment or business advantages.
“For that reason, the government has come up with a new investment framework that is almost like a scorecard, assessing whether a project contributes to economic complexity, creates high value-added jobs and delivers advantages for businesses,” he said.
Johan said the complementarity between the country’s economic ambitions and ability to leverage Hong Kong as a global financial centre will certainly help advance Malaysia’s economic aspirations.
“Beyond that, this collaboration will also give Malaysians access to a broader range of investment products, while creating more opportunities for Hong Kong investors to invest in the diverse companies we have here.
“The foundations always work best when there is a win-win proposition and complementarity in what each of us has to offer. Therefore, I am very optimistic about the MoU we signed today,” he said.
The SC and SFC signed a MoU on the mutual recognition and cross listing of covered funds, particularly exchange-traded funds (ETFs) and real estate investment trusts (REITs).
The MoU will also strengthen regulatory cooperation to facilitate a simplified dual initial public offering (IPO) listing framework between the two jurisdictions.
The SC said the initiative supports the Capital Market Masterplan 2026 to 2030’s aspiration to position Malaysia as a Gateway to Regional Opportunities through stronger regional connectivity and enhanced cross-border investment flows.
At the same time, it complements Hong Kong’s role as an international financial centre and gateway to Mainland China.
To facilitate the cross-listings of equity securities, the Stock Exchange of Hong Kong Ltd has added Bursa Malaysia Securities Bhd to the list of Recognised Stock Exchanges (RSEs).
The RSE status enables public limited companies listed on Bursa Malaysia to apply for a secondary listing in Hong Kong.
The simplified dual IPO listing framework allows issuers seeking simultaneous primary and secondary listing to use a single set of submission documents, including the prospectus. The simplified dual IPO listing framework will come into effect in September 2026.
Under the MoU, the range of products eligible under the mutual recognition of funds have been expanded to include ETFs, including futures-based ETFs, leveraged and inverse ETFs and commodity ETFs.
The mutual recognition of funds includes facilitating the crosslisting of REITs in each jurisdiction.
Recognising the need for regulatory cooperation to support the implementation of the SC–SFC MoU, the SC has also entered into a separate MoU with Hong Kong’s Accounting and Financial Reporting Council (AFRC).
The arrangement facilitates information sharing, supervisory assistance and coordination on financial reporting compliance and audit oversight matters.
This MoU will effectively facilitate the SC and AFRC to address cross-border issues as well as strengthen investor protection and confidence in both markets.
Hong Kong’s secretary of financial services and the treasury Christopher Hui said Hong Kong, as a global financial hub, has enormous synergy with Malaysia as a strategic economic partner.
Hui said Hong Kong could serve as an “international agent” for Malaysia in finance, given its strengths in terms of financial products, investors and growth.
“Hong Kong and Malaysia are also benefiting from the geopolitical tensions, where there is a global shift of economic activity from the West to the East.
“In that regard, one of the takeaways for Asian economies in general is that we cannot work alone. We have to work together to ensure that we can leverage the advantages and synergies that we can create among us,” he said.
Hui said Malaysia’s strengths in commodities, trading and high-value manufacturing complement Hong Kong’s efforts to diversify its economy beyond financial services, which account for about a quarter of its gross domestic product.
He said the MoU would help broaden Hong Kong’s economic base by embracing technology and attracting more industries.
“In this regard, we do want more listings, but at the same time we want to use finance as the anchor so that more industries can take advantage of Hong Kong’s uniqueness, while also leveraging the land available in northern Hong Kong to develop advanced manufacturing, biotechnology and artificial intelligence.
“All of these are on the government’s agenda. To support that, we need the right tools and instruments. We have to be an enabler and a facilitator. That is why we have set up an Office for Strategic Enterprises to target strategic industries.
“If they can bring economic value to Hong Kong, whether through employment or advanced manufacturing capabilities, we will provide incentives while ensuring their businesses can thrive in Hong Kong,” Hui said.
As such, Hui said the MoU collaborations come at an opportune time as Asian economies seek closer cooperation amid shifting global economic dynamics, while Hong Kong is undertaking reforms to strengthen the competitiveness of its capital markets.
He added Hong Kong is introducing measures to attract more technology companies to its market, reflecting the sector’s growing importance in driving economic growth.
“Technology is really the driver of the economy, and many technology companies are increasingly interested in utilising our capital market.
“I am very hopeful of this collaboration. Beyond having greater connectivity with Malaysia, which we definitely want, we also need to make ourselves more competitive so that you will see us as a very valuable partner,” he said.
