Kuala Lumpur, 25 October 2016
Securities Commission Malaysia (SC) commends the Government initiatives in Budget 2017 aimed at further developing the capital market.
The small and mid-cap sector comprises many companies that can benefit from more research coverage and investor interest. The introduction of a Small and Mid-Cap Public-listed Company (PLC) Research Scheme will help promote more liquidity and trading vibrancy in this sector. SC and Bursa Malaysia will initiate and operationalise this dedicated research scheme to provide independent analyst coverage on small and mid-cap companies.
In addition, a RM3 billion allocation from Government-Linked Investment Companies (GLICs) will be channelled into this sector. In an effort to create a more vibrant and diverse pool of investment managers in the small and mid-cap segment, allocations will be made to external fund managers with a specific mandate to be invested entirely in this segment.
These efforts are expected to result in increased interest from a wider cross section of investors, enhance diversity of investment strategies in the market, and create better value recognition of small and mid-cap companies. A working group comprising the industry, SC and Bursa Malaysia will operationalise these initiatives.
On Private Retirement Schemes (PRS), the additional allocation of RM165 million for the PRS Youth Scheme (aged between 20 and 30 years) demonstrates the Government’s continued support and strong desire to develop PRS as a voluntary third pillar of Malaysia’s retirement system. Under the enhanced incentive, the Government’s co-contribution will be increased on a 1-to-1 matching basis. Specifically, the Government will match RM1,000 accumulated savings in youths’ accounts with RM1,000 Government co-contribution. This will attract more Malaysian youths to participate early in PRS and motivate retirement saving behaviour from a young age. PRS Providers should take advantage of this opportunity to promote PRS to the youth segment while employers should capitalise on this incentive to package PRS as part of their employment benefits.
The establishment of the Capital Market Research Institute is designed to be the centre for product development, market innovation ideas and to research into issues and areas that will further grow and develop the capital market. It will also be a repository of relevant data and information on capital market statistics. Given the overall size of the capital market, which now stands at RM2.9 trillion, the establishment of a dedicated research institute will help bring together the best local and global experts from academia, industry and policy making to collaborate on ways to further deepen the role of the capital market in economic growth.
SECURITIES COMMISSION MALAYSIA