Bursa Malaysia Implements Strategies to Attract Global Investors

In a dynamic effort to attract global investors, Bursa Malaysia is considering strategic measures to boost the valuations of local companies. The Malaysian stock exchange is eyeing the implementation of a “formalised framework,” which could set targets for companies based on key financial metrics like the price-to-earnings ratio, return on equity, and free float. This move, discussed by Bursa Malaysia Bhd’s CEO, Datuk Muhamad Umar Swift, aims to enhance investor confidence and stir interest from foreign markets.

The Malaysian bourse’s initiative is part of a larger trend in Asia, as countries like Japan, South Korea, and China embark on corporate reforms aimed at maximizing shareholder returns and invigorating their local stock markets. These efforts are parallel to a surge in listings and a renewed sense of optimism in the Malaysian equities scene, especially with burgeoning investments in the nation’s data center sector.

Datuk Muhamad Umar Swift clarified that, while Bursa Malaysia isn’t looking to replicate the Tokyo Stock Exchange’s “name-and-shame” listing approach, it is encouraging a culture of accountability among listed firms to enhance their market value. If companies fail to meet set objectives, the exchange will engage directly with their boards to foster discussions on performance improvement.

The Malaysian stock market is demonstrating robust performance, with the FTSE Bursa Malaysia KLCI Index achieving an over 13% gain year-to-date, marking it as one of the leading performers in Southeast Asia. Underpinning this success is a remarkable 66.8% growth in the average daily trading value for on-market trades during the first half of the year, compared to the same period previously.

Looking ahead, Bursa Malaysia is targeting an ambitious 50 initial public offerings (IPOs) in 2025, compared to 42 this year, as revealed by Umar. The pipeline brims with potential listings, especially in health care and telecommunications. The regulatory body is also making IPOs more appealing by pledging to cut the IPO application process time from six months to just three. A noteworthy potential IPO capturing attention is Sunway Group’s health-care division, which could raise up to RM3.5 billion — possibly the nation’s largest since 2017.

Moreover, Umar anticipates that a growing number of companies from other regions, including those based in Singapore, may opt for dual listings or seek capital in Kuala Lumpur. This would not only lift the local equity market’s profile but also retain the momentum crucial to sustaining investor enthusiasm.

“You have good and improving performance in Malaysian corporates. We just want to keep that momentum,” Umar expressed, emphasizing the excitement this generates among investors and businesses eyeing listings. As Bursa Malaysia sets its sights on value-boosting strategies, it positions itself as an attractive destination for both regional and international capital, fostering a thriving investment ecosystem.