I recognise that longer-term market and structural reforms will be required for Malaysia’s capital market and economic transformation, says PM

by NURUL SUHAIDI / pic HUSSEIN SHAHARUDDIN

AN ‘EASIER and faster’ approval process for IPOs and reducing stamp duty rates on equities trading are among the immediate measures to enhance the local capital market.

Prime Minister Datuk Seri Anwar Ibrahim (picture) outlined the two measures in a speech at the office of the Securities Commission Malaysia (SC) which regulates the securities market.

“I recognise that longer-term market and structural reforms will be required for Malaysia’s capital market and economic transformation.

“However, as a start, in order to encourage more companies to be listed on Bursa Malaysia, the SC and Bursa Malaysia will implement reforms this year to make it easier and faster to list on Bursa Malaysia by expediting the IPO process and reducing time-to-market to ensure Malaysia’s competitiveness and attractiveness,” he said when launching the Capital Market Talent Programmer for Graduates today.

He said the Ministry of Finance (MoF), of which he is the minister, is working with the SC, with feedback from the local stock exchange and the capital market industry, to identify short-term and medium-term measures to enhance the capital market to drive greater economic growth, inclusion and sustainability.

The measures, cutting across three pillars, to enhance the capital market to drive greater economic growth, inclusion and sustainability will include creating market vibrancy with greater participation opportunities for the rakyat, attracting a larger pool of investors to support financing for SMEs and new economy; and implementing market and structural reforms to enhance Malaysia’s competitiveness to strengthen market confidence.

As part of the strategy to reduce the cost of securities transactions and competition for the Malaysian stock market, starting July this year, the stamp duty rate for shares traded on Bursa Malaysia Securities Bhd will be reduced to 0.1% from the current 0.15% of the contract value, subject to a maximum cap of RM1,000 per contract.

Under the second pillar, the government is looking to have a more facilitative policy to enable larger corporations to set family offices in Malaysia to encourage investment in SMEs, promote corporate venturing toward greater domestic direct investment (DDI), as well as widening the definition of sophisticated investors including angel investors.

“For example, enabling tax losses from corporate venturing to be utilised by the parent company to set off other sustainable investments in the group,” he said.

To encourage more companies to be listed on the local bourse, the market regulator SC and the stock exchange operator Bursa Malaysia will implement reforms this year to ease and fasten the list on Bursa Malaysia by expediting the IPO process and reducing time-to-market lesser than six months.

“The Government will continue to prioritise the enhancement of DDI, the attraction of FDI, and the promotion of sustainable investment practices,” he added.

Overall, he noted that the size of foreign direct investment (FDI) inflows grew to RM74.6 billion, an increase of 48% from the previous year.

He said the first quarter of 2023 has witnessed approved investments amounting to RM71.4 billion, showcasing a 60% surge compared to the corresponding period last year, underpinned by strong investment interest from, among others, Amazon Web Services, Tesla EV, Geely/Proton Automotive City in Tanjung Malim and Ronsheng Petrochemicals in Pengerang.

Anwar also noted that Malaysia recently secured investment commitments of RM13 billion from Singapore, RM24 billion from South Korea, RM170 billion from China and RM23 billion from Japan during recent trade and investment missions.

“The future of investments in Malaysia appears exceedingly promising and we are actively working towards improving the ease of conducting business, attracting high-value investments, and cultivating a highly competitive workforce,” he said.

“These impressive figures signify the approval of over 1,200 projects, poised to generate nearly 24,000 fresh employment opportunities,” he said.