Financial industry players are generally positive about the strategic initiatives highlighted in the Third Capital Market Master Plan (CMP3).
They see the five-year roadmap as a potential game changer that can catapult the Malaysian capital market to the next level of growth and dynamism, thereby supporting the country’s transition to a more developed country.
Bank Islam Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid (pictured), for his part, finds it encouraging that CMP3 is meeting the financing needs of businesses through various growth cycles.
“Entrepreneurship is a key catalyst for sustainable economic growth, as it promotes the creation of high-quality jobs capable of absorbing local talent.
“If we can do it right, the country could, over time, reduce its dependence on foreign labor,” he told StarBizWeek.
“CMP3 would complement the promotion of entrepreneurial activities in the private sector by closing their funding gaps,” he said.
From an investor perspective, according to Mohd Afzanizam, the CMP3 allows alternative investments with different degrees of risk / reward to grow.
“This is particularly important, as the low interest rate environment for longer is expected to persist into the future. As such, CMP3 would create a win-win platform for businesses and investors in a healthy ecosystem, ”he explains.
Coming from the robo-advisory industry, StashAway Country Director for Malaysia, Wong Wai Ken, (pictured above) welcomes CMP3 as it recognizes the potential of digital investment managers to provide better investment advice and access to global markets. “One such initiative is to liberalize all private pension plans or PRS providers to include robo-advisers to further expand the already effective pension plan,” Wong said.
“We look forward to deepening our reach to serve more investors and help them achieve their long-term goals,” he adds.
Launched during the week, the five-year CMP3 will set the direction of the Malaysian capital market from 2021 to 2025.
The comprehensive plan covers development in various sectors, from angel and crowdfunding to equity and bond markets.
It should be noted that CMP3 has a shorter timeframe compared to the 10-year period for CMP1 (2001-2010) and CMP2 (2011-2020). The reason is to give policymakers enough leeway to adapt to the rapid changes and development of the global financial system.
“The pace of development of the capital market has accelerated; there is now a greater level of uncertainty, ”says the Securities Commission.
“We consider five years as a balance – it is sufficiently” long term “to develop the national capital market, and yet it allows us to be agile to respond to the evolution of the financial market”, explains the regulator during from the recent CMP3 media technical briefing. A fund manager believes that shortening the timeframe for CMP3 is the right decision.
“Ten years is a long time in finance. Things are moving so fast now; it will be difficult to catch up with trends in the global financial system if you are locked into a plan that has a long duration, ”says the fund manager of a local financial institution.
“Overall, CMP3 seems relevant to the needs of the country. But as always, it’s all about implementation, and we’ll have to see what policies or subsequent changes roll out under CMP3 over the next five years, ”he adds.
According to Principal Islamic Asset Management Sdn Bhd CEO Datuk Paduka Syed Mashafuddin Syed Badarudin, CMP3 could promote a more sustainable and inclusive market in Malaysia, while responding to global megatrends and accelerating technological advancements.
He is also optimistic that the roadmap could further strengthen the country’s status as an innovative and well-regarded Islamic capital market in the world.
“As an advocate of syariah compliant investment, we support CMP3, as we see that there is alignment and commonalities between Islamic finance and ESG (environmental, social and governance) principles” , said Syed Mashafuddin.
“We strongly believe in syariah compliant investment and remain committed to supporting and contributing to the success of CMP3.
“We believe that shared responsibility and continued engagement between regulators and industry players are essential to achieve the goals of CMP3,” he adds.
Rapidly changing trends
The size of Malaysia’s capital market grew to RM3.4 trillion under CMP2, from RM2 trillion at the start of 2011.
AmBank Research notes that CMP3 initiatives are in line with the future economic trend, citing the focus on reducing the corporate finance gap through a diverse market and intermediation ecosystem; digital inclusion as the economy moves towards digitalization; shared responsibility, in particular on corporate responsibility to stakeholders beyond short-term profitability; and sustainability and ESG through increased capital mobilization.
AmBank Group Chief Economist Anthony Dass (pictured above) said the successful implementation of CMP3 over the next five years will put Malaysia on a higher pedestal among global capital markets.
“With greater efficiency and a more inclusive and diverse capital market, Malaysia would be able to generate more investor interest and better valuations, which in turn would benefit our businesses and the economy,” he emphasizes.
CMP3’s strategic initiatives are guided by six key development and regulatory priorities.
These strategic axes focus on stimulating competitive growth, empowering investors for a better future and shaping a stakeholder economy, while simultaneously integrating shared responsibility, prioritizing efficiency. and results, as well as by adopting technology. Taken together, these priorities aim to ensure that the capital market achieves the three desired outcomes: relevant, efficient and diverse.