Malaysian Capital Market To Evolve As Product Hub With Niches In ASEAN-Themed Through Masterplan
KUALA LUMPUR, March 9 (Bernama) -- The Malaysian capital market will evolve to become a product hub with niches in ASEAN-themed underlying, including Shariah-compliant ETFs, ethical, sustainable and infrastructure funds, through the implementation of the Capital Market Masterplan 2026–2030 (CMP).
The masterplan, which oversees a five-year plan, will also see the Securities Commission (SC) collaborate with other ASEAN regulators to ensure greater harmonisation of regulatory frameworks, standards and processes, with a view to reducing transaction frictions and increasing payment and settlement efficiencies.
SC said the Malaysian capital market stands at a strategic crossroad in terms of how it is to move forward to unlock regional opportunities.
"It is of little surprise that ASEAN’s share of the global economy is being elevated with the region projected to become the world’s fourth-largest economy by 2040.
"However, ASEAN capital markets are currently substantially under-represented relative to its economic presence. For example, ASEAN currently represents only four per cent of the MSCI Emerging Markets Index,
"The bright long-term economic growth prospects suggest there is huge upside potential for ASEAN capital markets and regional intermediation over the next two decades," it said.
According to the masterplan, in the transition to a multipolar-based global economy, ASEAN stands to benefit from a rapid increase in the levels of intra-regional trade and investment.
"There is thus significant incentive for the ASEAN capital markets regulators and their intermediaries to collaborate to unlock intra-regional cross-border capital flows to fund the growth of their economies and build regional resilience against global financial shocks," it noted.
In addition, intra-regional cross-border flows are likely to grow substantially as it is underpinned by rising Asian affluence and savings accumulation while the expansion of regional-linked products and cross-border fundraising would open new lines of intermediation business in origination, advisory and fund management, thereby creating opportunities for intermediaries to secure fresh mandates and new fee pools.
"Malaysia offers a compelling proposition with its Islamic Capital Market (ICM) size of RM2.7 trillion and globally-recognised sukuk expertise. Apart from unparalleled access to Shariah-compliant and ethical opportunities, Malaysia also plans to develop niches in sustainable, ethical and infrastructure finance.
"These attractions are underpinned by international acknowledgement of Malaysia’s regulatory strengths in relation to its governance and investor protection standards,” it added.
Overall, Malaysia is operating from a position of strength as it has a relatively mature capital market ecosystem with relatively sophisticated intermediaries, large government-linked and private institutional investors and excellent relationships with regional and global regulator, according to the masterplan.
The first CMP (2001–2010) laid the foundation for a modern capital market in the aftermath of the Asian financial crisis while CMP2 (2011–2020) restored market confidence post-global financial crisis. For CMP3 (2021–2025), it emerged in the wake of the COVID-19 pandemic.
The fourth iteration of the CMP by the SC was launched today by Prime Minister Datuk Seri Anwar Ibrahim
-- BERNAMA
