Towards more competitive capital market
Malaysia plans to set up a mercantile exchange within a year to enable investors to trade in gold futures and other precious metals.
The move, part of a slew of new initiatives announced by Prime Minister Datuk Seri Najib Razak yesterday to boost the capital market, follows strong demand from Malaysians to have an additional asset class to invest in.
"The government would like to ensure that such investments are done in a safer, transparent and structured environment," Najib said after launching the country's private retirement scheme (PRS) initiative.
Securities Commission (SC) chairman Datuk Ranjit Ajit Singh, in a press conference later, noted that there had been a lot of interest among Malaysians in the trading of gold and precious metals.
He said the SC would study other jurisdictions that have a similar initiative and then present a comprehensive proposal to the government on how the exchange should operate.
Najib also announced plans to establish a trading venue for unlisted companies so that small and medium enterprises (SMEs) could have an additional way to raise funds, aside from bank borrowings.
The SC will look into an appropriate regulatory framework to develop this alternative model for fund raising.
It would operate as an electronic platform, Ranjit said, stressing that it was not a stock exchange.
"It's an unlisted market for pre-initial public offerings. It encourages entrepreneurs to be able to access risk capital financing without the formalities and rigours of a listed market. Of course, we want them to (eventually) graduate to listed markets," he remarked.
He noted that big companies like Zynga and Facebook went through markets like these before getting listed.
Britain, for instance, has "Ofex", an independent public market dedicated to smaller companies and based on a quote-driven trading platform that now serves more than 500 companies.
Industry observers said the new initiatives would help make Malaysia's capital market more competitive in the region, with Singapore already having similar offerings.
"It is good to give investors options as they have different risk appetites," a banking executive told Business Times.
Both initiatives were expected to be launched within a year, Ranjit said.
Meanwhile, the SC, in a bid to broaden participation in the capital market, has created two new roles - execution agents and business development representatives (reps) - in the market.
Stockbroking companies will be allowed to engage these agents and reps to meet their business needs.
The SC's educational arm also plans to embark on a six-month nationwide campaign in October to educate investors and encourage greater participation in the capital market.
The campaign was expected to reach out to more than 1.5 million new and potential investors, Najib said.
"The government would like to ensure that such investments are done in a safer, transparent and structured environment," Najib said after launching the country's private retirement scheme (PRS) initiative.
Securities Commission (SC) chairman Datuk Ranjit Ajit Singh, in a press conference later, noted that there had been a lot of interest among Malaysians in the trading of gold and precious metals.
He said the SC would study other jurisdictions that have a similar initiative and then present a comprehensive proposal to the government on how the exchange should operate.
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The SC will look into an appropriate regulatory framework to develop this alternative model for fund raising.
It would operate as an electronic platform, Ranjit said, stressing that it was not a stock exchange.
"It's an unlisted market for pre-initial public offerings. It encourages entrepreneurs to be able to access risk capital financing without the formalities and rigours of a listed market. Of course, we want them to (eventually) graduate to listed markets," he remarked.
He noted that big companies like Zynga and Facebook went through markets like these before getting listed.
Britain, for instance, has "Ofex", an independent public market dedicated to smaller companies and based on a quote-driven trading platform that now serves more than 500 companies.
Industry observers said the new initiatives would help make Malaysia's capital market more competitive in the region, with Singapore already having similar offerings.
"It is good to give investors options as they have different risk appetites," a banking executive told Business Times.
Both initiatives were expected to be launched within a year, Ranjit said.
Meanwhile, the SC, in a bid to broaden participation in the capital market, has created two new roles - execution agents and business development representatives (reps) - in the market.
Stockbroking companies will be allowed to engage these agents and reps to meet their business needs.
The SC's educational arm also plans to embark on a six-month nationwide campaign in October to educate investors and encourage greater participation in the capital market.
The campaign was expected to reach out to more than 1.5 million new and potential investors, Najib said.
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