Keynote Address at the Malaysian Investment Banking Association (MIBA) Annual Dinner

Speaker: Dato’ Seri Dr. Awang Adek Hussin, Chairman SC Malaysia
Location: Kuala Lumpur
Delivered: 3 November 2023

Key Highlights

In his opening keynote, Dato’ Seri Dr. Awang Adek Hussin, Chairman of the SC, urged all MIBA members to work together to reinvigorate the market. This involves participating in numerous efforts aimed at including a larger segment of society in the market.

The capital market will also be setting up a ‘Tabung Kebajikan Pasaran Modal’ by the end of the year to provide financial aid to the B40 group to enable them access to tertiary education.

Here are highlights from his speech:

Through investED, the SC plans to reach out to 9,000 university students through nationwide career talks and fairs, and enable 2,400 university students and graduates to take capital market introductory Foundation Programmes.
Furthermore, the objective is to prepare 600 young graduates through the Leadership Programme which includes 6-month job placements in the industry.
The SC has come up with various initiatives to improve the state of the market, including reducing stamp duties and Board lot size, as well as enabling fractional share trading.
The SC’s other initiatives include widening the funding base to include financing for MSMEs, as well as the larger businesses and allowing dual class shares on Bursa Malaysia.
The SC intends to ease the process for companies wanting to list. This includes expediting the IPO process, reducing time-to-market and enabling an automatic promotion mechanism for the ACE Market to the Main Market for eligible PLCs.

Full Speech:

Yang Berusaha, Ms Lee Jim Leng, Chairman of the Malaysian Investment Banking Association (MIBA)
Distinguished guests,
Ladies and Gentlemen,
Assalamu’alaikum warahmatullahi wabarakatuh, and a very good evening.

Thank you for inviting me to speak at tonight’s MIBA Annual Dinner. When I first saw your theme for this year, dazzling gold, I checked to see if in fact it was your golden jubilee. No, I was told, that was still two years away. Perhaps it is typical of investment bankers, always punctual and timely, preparing for the events early and this time two years early. Anyway, it may not be a bad thing to be early as a habit, especially when it comes to submissions to SC before the deadline.
I’m not sure if you’re aware of it, but the SC is also celebrating our own anniversary. We turned 30 this year and as I took stock of all that we have achieved in the past 30 years, I realised that the SC has been quite busy since its inception in 1993.
Maybe some of you here are old enough to remember our beginnings during the super boom, and how crazy the market was back then. When the SC was created to temper this irrational exuberance and bring some discipline to the market, naturally, many were going to be unhappy. We commissioned a 30th anniversary book which involved talking to all the previous SC chairmen and many untold stories of the past 30 years surfaced, which I am sure will make interesting reading to all of us.
The book, which will be officially launched soon, will chronicle the challenges the SC’s pioneer team faced when it first started, the launch of derivatives in a market hostile to these instruments because of world events, the Asian Financial Crisis and the fallout from that, the coming up with the series of the Capital Market Master Plan, the struggle for more powers to prosecute wrongdoers in the capital markets, the development of the cutting-edge Islamic Capital Market (ICM) in Malaysia, and even the SC’s early recognition of the importance of sustainability and digital to the capital markets, way before everyone else leapt on the bandwagon.
Reading it all at once, gives you some idea of what the SC contributed towards the development of Malaysian capital markets. For example, after the Asian Financial Crisis, the equity market capitalisation grew from RM181.5 billion on Sept 1 1998 to RM1.8 trillion today.
The size of the corporate bond market, the regulation of which had only been shifted to the SC in 2000, went from RM172 billion in 2001 to RM1.9 trillion in 2022. And the SC, which started with just a handful of staff at a humble office at a corner of the old Finance Ministry in Jalan Duta, now has its own building in Bukit Kiara.

Ladies and gentlemen,
When I became the Chairman, I wanted the SC to be more open and engaging. A regulator, I feel, cannot work in an ivory tower, but has to know what its regulatees are going through and come up with solutions together. One such initiative that was developed as a result of direct feedback from the industry regarding the talent deficit was investED, a collaborative capital market graduate talent programme, that is supported by the ministries of finance and the higher education, as well as capital market players such as yourselves, stockbrokers and fund managers.
Based on industry surveys, we found that nearly 50% of capital market professionals are over 50 years old. Some are even in the 70s age bracket. The proportion of those aged 30 and below has decreased over the years to around 8%. And this challenge is not peculiar to Malaysia. According to Korn Ferry research published in 2019, by 2030, there will be a global talent deficit of over 85 million workers across economies, with the financial and business sectors having a skilled talent shortage of 10.7 million workers.
Through investED, we plan to reach out to 9,000 university students through nationwide career talks and fairs, enable 2,400 university students and graduates to take capital market introductory Foundation Progammes and groom and better prepare 600 young graduates through the Leadership programme which includes 6-month job placements in the industry.
We need your help here in hiring these candidates. InvestED is one of our more important initiatives that can groom the graduates into something that are not only acceptable but also employable.

Ladies and gentlemen,
These days, there is no more important topic of dinner conversation than the state of our market. However, I think we can turn it around if we work together. On our part, the SC has come up with a host of initiatives to reduce costs and increase investment opportunities for the investors.
For example, we reduced stamp duties in July this year. We have also reduced the Board lot size and enabled fractional share trading so that a greater section of the society has the means to participate in the stock market. We also noticed that not many young people have CDS accounts, which means that they are not investing in our stock market. This has to change. And we are committed to fostering more marketplaces for secondary trading of private instruments.
But we are not stopping there. We are not only looking to involve a greater section of society in the market. We want to widen the funding base to include financing for MSMEs, as well as the larger businesses. To do this, we have broadened the definition of sophisticated investors in Malaysia. We are also allowing dual class shares on Bursa Malaysia.
In deepening the pool of patient capital, we are working to attract the wealthy and family offices to Malaysia, while promoting corporate venturing to drive greater direct domestic investment.
We also want to make it easier for companies that want to list. This would include expediting the IPO process, reducing time-to-market and enabling an automatic promotion mechanism for the ACE Market to the Main Market for eligible PLCs.
As such, we need you to advise your clients to make the shift in line with the new policy priorities. We are going all out to help re-invigorate the market. We need to bring as many as possible the big cap companies to the Main Market, both through automatic promotion of ACE companies as well as new listing, to attract foreign investors into our market. We are also facilitating sustainability companies to be listed, to cater to the increasing demand for ESG investing. We must also find ways to make it easy for retail investors to invest. The fact that there was a mini boom in the market during the pandemic years shows that there is money out there and a will to invest. We need to prepare a more conducive ecosystem to attract this money into the capital market, instead of seeing so much of it being lost through scams and illegal investment activities.

Ladies and gentlemen,
I would also like to remind everyone that we are establishing the “Tabung Kebajikan Pasaran Modal” to be launched before the end of this year by our YAB Prime Minister. The Tabung aims to assist students from the B40 Group to access tertiary education by providing the necessary financial aid and help build future capital market talent. This initiative forms a part of the Malaysian capital market’s contribution towards the national agenda of a more inclusive Malaysia. I urge MIBA and its members, together with ASCM, MAAM, Bursa Malaysia and the PLCs to contribute generously towards this Tabung to make it a real success.
Finally, I would like to take this opportunity to once again stress the importance of combating financial scams and improving financial literacy. It is important that we continue to educate the public so that they can make smart and safe investment decisions.
We therefore look forward to your continuous support for the SC’s flagship investor education programme, InvestSmart Fest, which this year will be held on November 17-19 at the Kuala Lumpur Convention Centre.
On that note, I wish MIBA all the best in its activities and endeavours.
Thank you and enjoy your dinner.