Lending support to smaller companies
Datuk Seri Tajuddin Atan 
Datuk Seri Tajuddin Atan is the CEO of Bursa Malaysia

I would like to commend Focus Malaysia for conceptualising an event that recognises the achievements of businesses that are so often left under the radar but which deserve to be applauded and commended.

As of end-September, Bursa Malaysia had 725 public-listed companies (PLCs) with a market capitalisation of under RM1 bil on the Main Market, Ace Market and our new LEAP Market. “Under a billion” companies make up 80.4% of companies listed on the exchange, which I believe is a sizeable force to be reckoned with.

As the national exchange, Bursa Malaysia has recognised that smaller companies have needs which it can help to address. These needs include achieving higher visibility and gaining greater access to capital.

Towards helping companies gain higher visibility, Bursa Malaysia has successfully launched the Mid and Small Cap (MidS) Research Scheme together with the Securities Commission in May. As was shared during the launch, the objective of the scheme is to help raise the profile of small- and mid-sized companies through coverage reports by research houses.

I’m pleased to share that since its launch, we have seen good initial exposure with a total of 66 initiation coverage reports issued so far, and a target of 100 coverage reports for the year.

In terms of new options for SMEs to access capital, we launched our LEAP Market in July. The objective of this market is to identify those companies which are of high potential and to provide them with a platform to raise capital through sophisticated investors.

Towards correcting any misunderstandings about this new platform, Bursa Malaysia has conducted and continues to conduct advocacy programmes to better inform both issuers and investors on the LEAP Market.


• 725 PLCs have market cap of below RM1 bil

• US$30.4 bil raised on Bursa Malaysia from 2012 to 2016

• 69% of dividends in 2016 paid by PLCs with both global and domestic operations

• 75% of PLCs are shariah-compliant

• Malaysia is the largest market for sustainable investing in Asia,  ex-Japan 

Supporting business expansion

Further to this, I am glad to announce that the first listing on LEAP by Cloudaron Group Bhd on Oct 3 was very well received. The counter closed 50% higher on its first day and the share price has almost doubled since.

To summarise, these two key initiatives are to help small and medium companies to profile themselves and become more transparent while also allowing them to raise capital. My hope is that these initiatives will help companies with a market capitalisation of under RM1 bil to grow, and, if I may say, help to uncover some hidden gems.

Malaysia is home to the largest number of listed companies in Asean, some of which have businesses that reach far beyond the borders of this region.

For local companies looking to expand regionally or globally, the capital market remains one of the most – if not the most – viable avenues to raise much-needed capital. In this regard, Bursa Malaysia recorded the highest amount of funds raised in the last five years in Asean at US$30.4 bil.

As it is, almost half of our listed companies derive their revenue from their overseas operations. Additionally, some listed issuers which have diversified their business abroad are doing well financially as they are able to reward their shareholders with periodic dividend payments. Over two-thirds (69%) of total dividend paid out to shareholders last year came from listed companies with both domestic and overseas operations.

Therefore, for those of you who have regional, or even global aspirations, Bursa Malaysia can help to facilitate this. I say, capitalise on your listing status to further raise funds from the capital market.


Malaysia as an investment destination

To help attract and retain investors in your companies, we must continue to promote Malaysia as an attractive investment destination. To do this, we need to continue to promote the key value propositions of our marketplace. One of these propositions is our position as the leading Islamic capital market. We are recognised globally for having the most comprehensive ecosystem for enabling Islamic capital market businesses and transactions.

The wide range of shariah-compliant products and services, which promote good socio-economic values as an alternative to conventional finance, has further contributed to the appeal of our Islamic capital market. As such investments have also been looked at as ethical, our Islamic capital market is most relevant to investors who seek ethical or sustainable investments.

We believe our niche and reputation in this market will continue to attract foreign Islamic funds to invest in our shariah-compliant PLCs or ethical investments, which stand at 678 companies, or 75% of the total PLCs listed on the exchange.

Another value proposition for investors is seen in how Bursa Malaysia places significant emphasis on maintenance of market integrity with sound corporate governance practices and adequate levels of investor protection. I’m proud to say that our market governance and strength of investor protection are among the best in emerging markets, if not at par with developed markets.

The exchange also believes that there is a strong value proposition for PLCs to adopt, practise and report on sustainability in a meaningful manner. Bursa Malaysia has, for some time now, been supporting disclosure of non-financial information. As far back as 2007, we implemented rules requiring PLCs to disclose their corporate social responsibility (CSR) activities in the annual report. This laid the foundation for sustainability reporting in Malaysia.

Evidence has shown that businesses that actively embrace and embed sustainability practices tend to have a lower risk profile and better brand image. Organisations that look at their business holistically might discover untapped segments of the market which they can leverage to create opportunities for new revenue streams in addition to operating as a responsible corporate citizen.

According to the Global Sustainable Investment Review 2016, Malaysia was the largest market for sustainable investing in Asia excluding Japan, commanding 30% of investments last year. With global sustainable investments hitting US$23 tril and expected to grow further, adopting sustainability practices is not only wise, but has proven to be profitable.


The future

As we move towards developed market status, Bursa Malaysia has made, and continues to make, concerted efforts to further develop our capital market. We will see further liberalisation to promote competition and liquidity in the industry.

In the securities market, we have liberalised Regulated Short Selling, and we have also provided 100% clearing fee rebate for ETF market makers. And as mentioned, we launched the MidS Research Scheme. In the derivatives market, the exchange introduced the Green Lane policy to shorten the time to market for futures brokers and general clearing participants.

We also decoupled clearing participantship from trading participantship to allow for standalone clearing participants.

To further promote innovation, we have our innovative LEAP Market and our Bursa Malaysia-i, the world’s first end-to-end shariah investing platform.

As broad-based improvements continue, it is with much pride that we continue to strengthen our status as a destination for investors looking for an advanced emerging capital market with tremendous growth opportunities.

While we are proud of the success that we have achieved thus far, we are certainly not resting on our laurels. Malaysia will continue to step up to remain ahead of the curve and to evolve and solidify our position as a vibrant capital market.

And we should do this together. Only by collaborating can we create a vibrant and robust capital market ecosystem.

Datuk Seri Tajuddin Atan is the CEO of Bursa Malaysia

This article first appeared in Focus Malaysia Issue 256.