PETALING JAYA: Strengthening capital market promotional efforts, building a stronger domestic issuer pipeline, creating greater market vibrancy, widening the pool of investors, as well as intensifying efforts relating to leverage on the sustainability agenda and Malaysia’s leadership in the Islamic capital market were among the topics discussed at the Securities Commission Industry Dialogue 2023 (SCID 2023) last week.

This year’s dialogue was held following the launch of “Ekonomi Madani” by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim on July 27.

Sixty capital market industry leaders and senior representatives shared ideas and proposals as well as highlighted issues and challenges on a range of topics under three broad areas – investment opportunities, funding inclusivity and market reforms.

The SC in a statement said the industry participants expressed their appreciation on the slew of capital market measures announced by the prime minister recently, as well as those announced in February and June.

It said several measures have since been implemented, namely, reduction of stamp duty for share trading and secondary trading in the private market.

Further, the industry looks forward to the implementation of other initiatives, including widening the definition of sophisticated investors, which the SC expects will take effect before the end of the year.

Discussions at SCID 2023 also focused on the three recent capital market measures announced by the prime minister last week, namely reducing the current board lot size for trading on Bursa Malaysia from 100 units to a more affordable level; enabling fractional share trading by investors through stockbrokers, and enabling automatic transfer for companies listed on the ACE Market to the Main Market of Bursa Malaysia, subject to certain criteria.

SC chairman Datuk Seri Dr Awang Adek Hussin said: “By continuing to collaborate with various stakeholders, the SC can leverage on their expertise to drive the required reforms and improvements towards strengthening the Malaysian capital market’s vibrancy, inclusivity and competitiveness.”

The reduction of board lot size and introduction of fractional trading of shares traded on Bursa Malaysia, he added, will provide greater accessibility to a wider group of investors, especially the retail and the younger groups, to invest in the stock market and build a balanced portfolio.

This will increase trading and liquidity, which will benefit companies and investors, and create a more active and dynamic market.

Awang Adek said Bursa Malaysia is looking at reducing the board lot from 100 shares, taking into account the need for the most effective approach with brokers agreeing to review the current minimum commission to allow for the lowering of board lot size.

Further, the SC has agreed to provide securities brokers the flexibility to offer fractional trading to enhance retail investors’ access to the stock market. Brokers offering fractional trading of shares listed on Bursa Malaysia will need to adhere to a set of principles, such as price transparency.

In relation to the automatic transfer of companies listed on the ACE Market to the Main Market, some of the broader issues and principles discussed at SCID 2023 include having criteria to ensure the sustainability of the promoted companies to continuously meet with requirements to remain in the Main Market.

Awang Adek said the transfer process will benefit qualified ACE Market companies by providing them with greater visibility and access to a larger pool of investors.

He added that increased number of listed companies with large market capitalisation on the Main Market will offer more investors, particularly large as well as foreign investors, a diverse range of investment opportunities in the Malaysian capital market.

The criteria and process are being reviewed and discussed together with Bursa Malaysia, and announcements will be made when the framework is finalised, Awang Adek said.

He added: “We target the eligibility criteria for the automatic transfer to be ready by end-2023, while the broad principles for the fractional trading will be released by end of third quarter this year.”