KUALA LUMPUR: Malaysia needs to revamp its capital markets and finance to draw the attention of foreign investors and compete more effectively with its neighboring markets, by focusing on infrastructure project listings, digital infrastructure funds, and closer cooperation with other regions, according to the Institute for Capital Market Research Malaysia (ICMR).
Its Chairman Tan Sri Munir Majid said these efforts can position Malaysia as an appealing destination for global investors and strengthen its financial standing in the international arena.
On infrastructure listing, he said it is important to revive such listings, especially within the context of the Belt and Road Initiative (BRI) through collaboration with the Shanghai Stock Exchange or other international exchanges, he said.
"Malaysia can attract foreign investors to fund crucial infrastructure projects, ranging from water and power facilities to bridges and roads, under the BRI umbrella," said Munir.
He also proposed to set up digital infrastructure funds that can be listed on the market as such funds would enable investors to participate in digital projects, including artificial intelligence initiatives, managed by experts.
The introduction of these funds would create an investment avenue specifically tailored to the burgeoning digital industries, thereby adding diversity to Malaysia's market offerings, said Munir.
Furthermore, to boost interest in Malaysia's capital markets both locally and internationally, he also stressed the importance of forging stronger relationships with other countries, capital market jurisdictions, and organisations.
Munir said by fostering intimate partnerships and exchanges with other regions, Malaysia can build goodwill, knowledge, and friendships that contribute to its status as a regional capital market training and educational center.
He also urged greater involvement in ASEAN discussions and projects, emphasising the potential for enhanced cooperation in terms of currency and capital markets.
Existing platforms like the Chiang Mai Initiative Multi-lateralisation (CMIM), which provides financial support to member states during currency-related crises. These platforms, including the ASEAN Plus Three macroeconomic research office (AMRO), have not been fully utilised and expanded to establish an ASEAN Monetary Fund.
Munir clarified that such efforts are not aimed at opposing other global financial institutions but rather to ensure the stability of regional currencies and economies.
Meanwhile, the Securities Commission chairman Datuk Seri Dr Awang Adek Hussin in his keynote address said despite the significant growth of Malaysia's capital market, with a value surpassing RM3.6 trillion as of June 2023, its international prominence has diminished due to the emergence of other regional markets.
However, the success of Malaysia's corporate bond market has been recognised by international institutions like the World Bank, he said.
"Now, markets in neighbouring countries are fast catching up and have generated a lot of interest from foreign investors. So what must be done to recreate interest in our markets?"
"We must leverage on our thought leadership, push the boundaries and continue broadening the spectrum of traditional and alternative products. This means enabling products and outcomes that are not only Shariah-compliant, but aligned to the broader principles of Maqasid al-Shariah, to meet the growing demand for Islamic products of higher order," said Awang Adek.