Role of MESDAQ in the Development of the Malaysian Capital Market

Kuala Lumpur, 18 February 1997

The proposed new market is expected to play a role similar to that of Nasdaq in the US information technology sector. It has been recognised that the dynamics of the Nasdaq market is a key component in the development of the software industry; by providing an arena for venture capital opportunities to grow and motivate engineers and business people to work in start-ups. The successful implementation of this new market would greatly contribute towards fulfilling Malaysia's desire to promote technology-intensive industries and develop a strong science and technology base through indigenous research and development (R&D) efforts. More directly, MESDAQ can be expected to make an important capital market contribution to the development of the Multimedia Super Corridor (MSC) as envisaged by the Prime Minister.

If structured appropriately, the new market has the potential to extend beyond merely catering to the needs of Malaysian incorporated technology-based companies. The Government has a stated policy of making Kuala Lumpur a regional capital centre; one where we can provide the leadership and expertise with regard to the financing needs of the region. Hence in the longer term, the new market can be the platform to provide a Nasdaq-like market for high-technology companies and small companies with growth potential from within the Asean region.

Going one step further, the proposed new market will be positioned to attract Asian companies which are already trading on Nasdaq or other North American exchanges, like Vancouver's Asian Board, which may be interested to seek a secondary listing within this time zone.

SECURITIES COMMISSION MALAYSIA