Key Highlights Of Invest Malaysia 2023 Relating To The Capital Market Landscape Of Malaysia
Bursa Malaysia Berhad (Bursa Malaysia) in collaboration with Malayan Banking Berhad, (Maybank) hosted the Invest Malaysia Kuala Lumpur 2023 conference (IMKL) recently. The conference with the theme “Reshaping Malaysia’s Narrative: Strengthening Resilience & Sustaining Growth” was officiated by the Prime Minister.
This alert seeks to highlight the key points discussed during the IMKL and its effect on the capital market of Malaysia.
Seed Funding On Bursa Carbon Exchange
The Government commitment to provide RM10 million in seed funding to encourage the demand for Malaysian-generated carbon credits traded on the Bursa Carbon Exchange (BCX). The establishment and seed funding of the BCX will provide a platform for companies to trade carbon credits and other sustainable commodities. This in turn will encourage issuers and project developers to invest in the necessary efforts and processes to enable carbon credit issuance and promote the voluntary carbon market.
In line with Malaysia’s commitment towards achieving net zero greenhouse gas emissions by as early as 2050, BCX is an innovative initiative that creates a new asset class for investors and promotes sustainable economic development in Malaysia. The exchange benefits the capital market of Malaysia by providing a new avenue for investment, encouraging the growth of sustainable industries.
Enhanced LEAP Market Transfer Framework And Approved Adviser Framework For The ACE Market
Bursa Malaysia will be enhancing the current regulations to facilitate LEAP Market listed companies to transfer to the ACE Market. In addition, Bursa Malaysia will share further enhancements to the Approved Adviser Framework to expand the pool of sponsors and corporate advisers for the ACE Market.
The implementation of the transfer framework will serve as a great initiative for small medium enterprises listed on the LEAP Market to transfer to the ACE Market to gain a wider access to capital markets to fuel business growth. An increased number of listed companies on the ACE Market can provide more opportunities for investors to participate in the market and can help to democratise access to capital.
Development Of A Centralised Sustainability Reporting Platform (CSRP)
The CSRP will enable companies, both publicly listed and non-listed SMEs, to calculate their carbon emission impact and disclose common environmental, social and corporate governance (ESG) datasets in a standardised manner. The idea is to conform to established global standards such as the Task Force on Climate-Related Financial Disclosures (TCFD). The initiative will be led by Bursa Malaysia and will include a consortium of two Malaysian conglomerates and a panel of banks.
The CSRP benefits the capital market in Malaysia by providing investors with more comprehensive and reliable information on ESG performance of listed companies. This allows investors to make informed investment decisions based on a company’s sustainability performance, which can ultimately drive positive changes in corporate behavior towards ESG issues.
With the increasing awareness of corporate responsibility towards ESG issues, the CSRP will serve as a check and balance for listed companies to always ensure compliance with global standards to remain attractive to all investors.
Enhancement Of Islamic Finance Ecosymtem In Real Estate Investment Trusts And Islamic Exchange Traded Funds
The adoption of the Waqf-Featured Fund Framework to include Islamic Real Estate Investment Trusts (REITS) and Islamic Exchange Traded Funds (ETFs) broadens the range of Islamic capital market products which support socio-economic development, greater public good and wealth distribution in the Malaysian capital market.
The Waqf-Featured Fund Framework is an Islamic Finance framework combining the benefits of waqf (an Islamic endowment) with the investment potential of a fund, where investors are able to use their money to support charitable causes in a sustainable way. By creating a mechanism for waqf assets to be channeled into the capital market, this framework helps to encourage more people to give to charitable causes and promotes sustainable development in the community.
The enhancement of this framework will also increase the availability of Shariah compliant investment products in Malaysia, thereby broadening the range of investment opportunities available to investors. This is likely to attract more investors, both domestic and foreign, to Malaysia's capital market.
Conclusion
The IMKL was a capital market conference for local and international investors to gain insights into the investment landscape in Malaysia. It showcased the country's economic strengths, visions and policies, and opportunities for investment, particularly on Malaysia’s eagerness to adopt and align with international standards on ESG issues and sustainability matters in the country’s capital markets.
17 April 2023