Bursa Malaysia eyes greater retail participation via new app

Bursa Anywhere, a mobile app, designed to aid the exchange holding company’s goal


Bursa Malaysia Bhd is looking to increase retail participation in local equities to 30%, within the medium to longer term from the current 25%, as it seeks a more balanced ratio between retail and institutional investors.

CEO Datuk Muhamad Umar Swift said the local bourse has seen greater retail trading on a year-on-year basis, in line with its goal of having a vibrant market with retail, institutional and foreign players.

“What we look for is balance. We’d like to see more retail investors. Currently, institutional investors make up about 75% of the market and retail investors comprise the remaining 25%, so the longterm goal is to get it to a 70:30 ratio,” he said at the official launch of the Bursa Anywhere mobile app in Kuala Lumpur yesterday.

“In the medium term, that would be within five years,” he added.

Bursa Anywhere is expected to aid the domestic exchange’s goal, as it is a mobile app designed to provide a consolidated view of investors’ central depository services (CDS) accounts, and other CDS-related functions, on a 24/7 basis.

The app is the first of its kind among other Asean mobile depository services, as well as second in Asia after Taiwan.

“We’re specifically targeting retail investors with Bursa Anywhere,” Muhamad Umar said, adding the tool will become “the one place” for the nearly two million CDS account holders to manage all matters relating to their accounts.

Muhamad Umar also said the domestic market is expected to see more initial public offerings (IPOs) in the second-half of this year, as Bursa Malaysia is “seeing more listings coming in…from everywhere” across all boards — the Main Market, the Leading Entrepreneur Accelerator Platform (LEAP) and the ACE Market.

He acknowledged that the majority of IPOs so far, as well as in 2019, were mainly LEAP Market-bound, although bigger listings are making a comeback.

“We’re happy to see the Main Market coming back. Last year was quite lean for the Main Market. We have more Main Board listings coming up but there are challenges to overcome,” he said, without elaborating on these challenges.

However, bigger IPOs would also have to be timed well, Muhamad Umar said, noting that “there are a couple of large companies wanting to list” but as savvy owners, these parties would want to maximise their returns.

“We have a good depth of market and large institutional investors, so it’s a question of valuation which is a function of earnings,” he added.

Twenty two companies were listed in 2018 versus 14 in 2017, although the total amount raised last year was a paltry

RM633.12 million compared to RM7.38 billion raised in 2017 due to the absence of large Main Market IPOs.

The slowdown in IPOs were largely attributed to cautious investor sentiment amid volatility on the external front, as well as lingering concerns over domestic policymaking following the formation of the Pakatan Harapan government in May last year.

At the moment, Bursa Malaysia’s focus is on bringing “new age companies” to the local bourse, as the equities market today is “very traditional”, said Muhamad Umar.

“We would like to see Industry 4.0 and people who are enabling that to come to the market. We’d like to see new offerings that will actually excite people. Something that will bring new opportunities,” he said.

With the ongoing external headwinds, namely US-China trade tensions, Malaysia still remains an attractive market due to its sound fundamentals and stable economy.

“Trade tensions provide a certain degree of uncertainty, and investors do not like uncertainty. Sentiment is driven by externalities, so what we’re looking to do is make sure we’re well positioned. Domestically, we’re robust,” Muhamad Umar said.