PETALING JAYA: The Malaysian capital market is set to benefit from the domestic economic recovery, but it also needs to continuously revamp itself to meet the market needs.
Securities Commission (SC) executive director of Islamic Capital Market Development (ICMD) Sharifatul Hanizah Said Ali said in tandem with the launch of the Capital Market Master Plan 3 (CMP3), a five-year strategic plan for the growth of Malaysia’s capital market, it was essential for the stakeholders to align focus and assess impact to deploy different approaches and initiatives that best cater to the needs of the market.
“The strategic initiatives over the next five years will be guided by key development and regulatory priorities.
“These strategic thrusts focus on catalysing competitive growth, empowering investors for a better future and shaping a stakeholder economy, whilst embedding shared accountability, prioritising efficiency, and outcomes, as well as embracing technology,” Sharifatul Hanizah said in her keynote address at the ninth Malaysian Financial Planning Council e-Conference yesterday.
The CMP3, which was launched in September last year, seeks to leverage on the strengths and potential of the Malaysian capital market to accelerate economic growth that is sustainable and inclusive.
Despite the challenging economic environment brought about by the Covid-19 pandemic, Sharifatul Hanizah said the capital market continued to play its critical role in financing the economy.
In 2021, the size of the Malaysian capital market grew by 3% to RM3.5 trillion from RM3.4 trillion a year earlier.
The total funds raised from the capital market remained robust in 2021, rising to RM130.9bil, above the five-year pre-pandemic average of RM121.4bil.
Sharifatul Hanizah said the SC aimed to facilitate a conducive environment to support investor empowerment and elevate financial literacy in line with the CMP3.
“The investors are at the ‘heart’ of achieving this goal, and therefore I would be remiss if I did not speak on the importance of the roles the financial planners play and that is to uphold the highest standard of professionalism by giving investors sound financial advice and ensure they meet their long-term financial goals.
“Investors need to be able to assess the impact of their investments and priorities, and financial planners are indeed the ‘bridge’ to enable investor empowerment,” she said.
She added that it was imperative to raise the bar on professional standards and conduct requirements to enhance professionalism in the financial planning industry.
For this, the SC had issued Guidelines on Conduct for Capital Market Intermediaries on April 1, which also applies to licensed financial planners to foster good business conduct and a good corporate culture that is centred on the fair treatment of clients and to promote trust in all intermediaries.
Sharifatul Hanizah said while regulation can play a role to promote the right culture, the industry must also continue to shape the right behaviours within their own organisations.
“To this end, it is commendable to see the industry’s harmonisation and elevation of the code of ethics and best practice standards by the relevant certification associations,” she noted.
Sharifatul Hanizah highlighted that CMP3 was also focusing on facilitating greater digital inclusiveness across a spectrum of investors.
“From a capital market perspective, digital advances allow for greater upscaling of existing capabilities, open new market segments and business modalities and provide more inclusive solutions for fundraising,” she said.
“Inclusivity has also been driven through digital intermediation models, when in 2021 the market saw the emergence of another digital-only broker to cater to the growing number of retail investors utilising online brokerage accounts.
“This is especially relevant given the increased retail interest in the equity market during the pandemic.
“Therefore pushing digital brokers to new highs, gaining a retail market share of more than 5%,” she added.