ID :
174731
Tue, 04/12/2011 - 07:10
Auther :
Shortlink :
https://oananews.org//node/174731
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M'SIA'S 2ND CAPITAL MKT MASTERPLAN LAUNCHED, TO BE WORTH US$1.93 TRILLION IN A DECADE
By M. Saraswathi
KUALA LUMPUR, April 12 (Bernama) -- Prime Minister Najib Razak Tuesday
unveiled the second Capital Market Masterplan or CMP2 as a successor
to the highly-successful first plan, which in the next 10 years is forecast to
swell the value of the capital market to RM5.8 trillion (US$1.93
trillion)through greater internationilisation from RM2 trillion (US$0.67
trillion) now.
He said CMP2 would come into force immediately under the Securities
Commission’s annual business plan with changes to the regulatory framework for
fundraising and product regulation to slash unnecessary red tape and lead to
faster turnaround of approvals,
Aimed at unlocking the potential of the market, Najib, who is also Finance
Minister, said that there would be a new dual licensing scheme to make it easier
for dealers in the equity market to become licensed to trade in the derivatives
market.
There were also plans to increase the number of Proprietary Day Traders by
almost threefold to enable more dealer representatives to become specialised
traders, he said at the "Invest Malaysia 2011" conference attended by captains
of industry, fund managers and institutional investors and more than 850
delegates from over 200 corporations from Malaysia and the world over.
"These are just three of the CMP2 programmes, and they will come into force
from the third quarter of this year – no distractions, no delays, just swift,
effective action.
"We must do everything we can to ensure that Malaysia’s capital market
doesn’t just grow, but grows with minimal risks in a well-regulated
environment," he said, reaffirming the government’s seriousness in accelerating
economic growth and the social development in Malaysia.
The first CMP was successful in making Malaysia’s capital market to grow to
RM2 trillion despite starting from the narrowest of bases, he said.
"Our stock market is home to more public listed companies than any other
inside Asean, our bond market is the third-largest in the whole of Asia when
benchmarked against GDP, and our Islamic capital market leads the world," he
said.
The current forecasts for the capital market size is to more than double to
RM4.5 trillion (US$1.5 trillion) by 2020, and with greater internationalisation
this figure could increase to as much as RM5.8 trillion over the same period, he
said.
Najib said one of the key priorities for CMP2 is to strengthen the role of
the capital market in promoting capital formation from the start-up stage to the
financing of innovative ventures, big new projects and cutting-edge green
technology.
To achieve this, the government will allocate more funds to the venture
capital and private equity industries through formalising regulatory oversight
and providing targeted incentives and support.
"And to boost large-scale transactions, access to the bond market will also
be widened, strengthening investor appetite for a wide range of debt products
and credit risks, expanding the participation of the investment management
industry and retail investors in fixed income investments, and enhancing the
market infrastructure," he said.
Among others, he said Malaysia’s high savings are expected to drive the
rapid growth of the investment management industry, with assets under management
projected to rise from RM377.4 billion (US$125.8 billion) in 2010 to a very
substantial RM1.6 trillion (US$0.53 trillion) in 2020.
Strong growth within the asset management industry is a key feature of any
country in transition to becoming a fully developed nation.
As a reflection of the widespread confidence in Malaysia’s investment
management industry, he said the penetration rate of the unit trust industry is
expected to almost double from 18 per cent in 2010 to 34 per cent in 2020 –
levels more commonly associated with developed markets.
This will, in turn, substantially increase the creation of income-generating
assets to meet the needs of domestic institutional investors, he said.
Hence, to enhance intermediation efficiency in recycling domestic savings
into financing the development of a diverse and vibrant economy, there will be a
review of the system-wide effects of institutional investment strategies,
particularly to ensure the optimal deployment of GLIC funds.
"More efficient intermediation of national savings will have far-reaching
effects on accelerating capital formation, private sector participation,
secondary market liquidity, risk-taking and expanding product and service
diversity," he said.
He said efforts will also be made to attract specialist fund managers and to
promote greater diversity in investment strategies, strengthening the links
between national savings and economic growth.
Expanding the number of products on the derivatives market is another
development that will be crucial to deepening market liquidity, improving the
ability to trade across markets and to hedge risks.
Specifically for the Islamic finance and banking sector, Najib said the task
now for the industry is to shift the focus of Islamic finance from serving
domestic needs towards tapping the tremendous growth opportunities from
intermediating international investments and corporate transactions.
The internationalisation of the capital market is a necessary pre-requisite
to strengthening Malaysia’s Islamic Capital Market hub – set to increase almost
threefold from RM1.1 trillion in 2010 to RM2.9 trillion in 2020.
CMP2 outlines strategies to enhance the distinctive value propositions
offered by Malaysia for a broad range of Islamic intermediation activities,
including increasing our capacity to structure cross-border transactions to make
further inroads into the international sukuk market.
In addition, the Securities Commission will collaborate with key industry
players to expand the range of Shariah-compliant stock broking products and
services and build greater critical mass for the development of onshore
portfolio management.
A seeding strategy will be developed to increase the diversification of
Islamic investment strategies, particularly in nurturing high value-add Islamic
fund management services such as the Shariah-compliant venture capital and
private equity industries that invest based on the Islamic principles of active
partnership and socially-responsible investing.
The Securities Commission will also work to encourage the wider shift from a
Shariah-compliant approach to a Shariah-based approach, promoting higher levels
of innovation and international marketability, he said.
KUALA LUMPUR, April 12 (Bernama) -- Prime Minister Najib Razak Tuesday
unveiled the second Capital Market Masterplan or CMP2 as a successor
to the highly-successful first plan, which in the next 10 years is forecast to
swell the value of the capital market to RM5.8 trillion (US$1.93
trillion)through greater internationilisation from RM2 trillion (US$0.67
trillion) now.
He said CMP2 would come into force immediately under the Securities
Commission’s annual business plan with changes to the regulatory framework for
fundraising and product regulation to slash unnecessary red tape and lead to
faster turnaround of approvals,
Aimed at unlocking the potential of the market, Najib, who is also Finance
Minister, said that there would be a new dual licensing scheme to make it easier
for dealers in the equity market to become licensed to trade in the derivatives
market.
There were also plans to increase the number of Proprietary Day Traders by
almost threefold to enable more dealer representatives to become specialised
traders, he said at the "Invest Malaysia 2011" conference attended by captains
of industry, fund managers and institutional investors and more than 850
delegates from over 200 corporations from Malaysia and the world over.
"These are just three of the CMP2 programmes, and they will come into force
from the third quarter of this year – no distractions, no delays, just swift,
effective action.
"We must do everything we can to ensure that Malaysia’s capital market
doesn’t just grow, but grows with minimal risks in a well-regulated
environment," he said, reaffirming the government’s seriousness in accelerating
economic growth and the social development in Malaysia.
The first CMP was successful in making Malaysia’s capital market to grow to
RM2 trillion despite starting from the narrowest of bases, he said.
"Our stock market is home to more public listed companies than any other
inside Asean, our bond market is the third-largest in the whole of Asia when
benchmarked against GDP, and our Islamic capital market leads the world," he
said.
The current forecasts for the capital market size is to more than double to
RM4.5 trillion (US$1.5 trillion) by 2020, and with greater internationalisation
this figure could increase to as much as RM5.8 trillion over the same period, he
said.
Najib said one of the key priorities for CMP2 is to strengthen the role of
the capital market in promoting capital formation from the start-up stage to the
financing of innovative ventures, big new projects and cutting-edge green
technology.
To achieve this, the government will allocate more funds to the venture
capital and private equity industries through formalising regulatory oversight
and providing targeted incentives and support.
"And to boost large-scale transactions, access to the bond market will also
be widened, strengthening investor appetite for a wide range of debt products
and credit risks, expanding the participation of the investment management
industry and retail investors in fixed income investments, and enhancing the
market infrastructure," he said.
Among others, he said Malaysia’s high savings are expected to drive the
rapid growth of the investment management industry, with assets under management
projected to rise from RM377.4 billion (US$125.8 billion) in 2010 to a very
substantial RM1.6 trillion (US$0.53 trillion) in 2020.
Strong growth within the asset management industry is a key feature of any
country in transition to becoming a fully developed nation.
As a reflection of the widespread confidence in Malaysia’s investment
management industry, he said the penetration rate of the unit trust industry is
expected to almost double from 18 per cent in 2010 to 34 per cent in 2020 –
levels more commonly associated with developed markets.
This will, in turn, substantially increase the creation of income-generating
assets to meet the needs of domestic institutional investors, he said.
Hence, to enhance intermediation efficiency in recycling domestic savings
into financing the development of a diverse and vibrant economy, there will be a
review of the system-wide effects of institutional investment strategies,
particularly to ensure the optimal deployment of GLIC funds.
"More efficient intermediation of national savings will have far-reaching
effects on accelerating capital formation, private sector participation,
secondary market liquidity, risk-taking and expanding product and service
diversity," he said.
He said efforts will also be made to attract specialist fund managers and to
promote greater diversity in investment strategies, strengthening the links
between national savings and economic growth.
Expanding the number of products on the derivatives market is another
development that will be crucial to deepening market liquidity, improving the
ability to trade across markets and to hedge risks.
Specifically for the Islamic finance and banking sector, Najib said the task
now for the industry is to shift the focus of Islamic finance from serving
domestic needs towards tapping the tremendous growth opportunities from
intermediating international investments and corporate transactions.
The internationalisation of the capital market is a necessary pre-requisite
to strengthening Malaysia’s Islamic Capital Market hub – set to increase almost
threefold from RM1.1 trillion in 2010 to RM2.9 trillion in 2020.
CMP2 outlines strategies to enhance the distinctive value propositions
offered by Malaysia for a broad range of Islamic intermediation activities,
including increasing our capacity to structure cross-border transactions to make
further inroads into the international sukuk market.
In addition, the Securities Commission will collaborate with key industry
players to expand the range of Shariah-compliant stock broking products and
services and build greater critical mass for the development of onshore
portfolio management.
A seeding strategy will be developed to increase the diversification of
Islamic investment strategies, particularly in nurturing high value-add Islamic
fund management services such as the Shariah-compliant venture capital and
private equity industries that invest based on the Islamic principles of active
partnership and socially-responsible investing.
The Securities Commission will also work to encourage the wider shift from a
Shariah-compliant approach to a Shariah-based approach, promoting higher levels
of innovation and international marketability, he said.
