5 initiatives to spur capital market growth

Source From (The Sun Daily): http://www.thesundaily.my/news/391988

Published: on 30 May 2012
Premalatha Jayaraman
sunbiz@thesundaily.com

KUALA LUMPUR (May 30, 2012): The government has unveiled five initiatives to drive further growth in the capital market to ensure it remains competitive and continues to drive the country's economic and national agenda growth.

Announcing the initiatives in his keynote speech at Invest Malaysia 2012 here yesterday, Prime Minister Datuk Seri Najib Razak said Bursa Malaysia has been tasked to set up a new foundation, made up of key industry stakeholders, to address any growth gaps in the market, with specific focus on small and medium enterprise (SME) growth, marketplace innovation and the development of new and existing talent.
To support this, he said the Capital Market Development Fund will allocate a RM100 million grant for the foundation, which will be chaired by the Treasury's secretary-general.

From June 1, he said, companies participating in the Skim Latihan 1Malaysia (SL1M) programme will be entitled to a double tax deduction incentive on allowances and training expenses.

"A private sector-led corporate service responsibility initiative to enhance the employability of both soft skills and on-the-job training is already revealing the true brilliance of thousands of unpolished gems," he said.
Najib also said that from next year, a double tax deduction initiative will be provided for training expenditure incurred by companies re-employing women after a career break to promote gender diversity in the workplace and to support women seeking to return to work.

"I would also encourage leading listed corporations to disclose in their annual reports, the policies such as flexible working arrangement, they have put in place to help promote and support women," he said.

In order to eliminate sticking points and to ensure that issuers, intermediaries and investors have access to an efficient, effective and facilitative marketplace, Najib asked Finance Minister II Datuk Seri Ahmad Husni Hanadzlah to establish and head a Capital Market Task Force.

He said the task force will make recommendations and identify clear implementation programmes to streamline regulatory and market management processes. This will be completed by the end of the third quarter, with a fully consolidated market framework in place by this time next year.

Najib said a Consolidated Capital Market Compensation Fund will be set up to consolidate the existing compensation scheme estimated at over RM420 million as well as to serve as a one-stop centre for investor compensation.

"Taken together, these are the core issues we need to tackle — issues that, left unaddressed, risk undermining the sustainable growth we seek. I am determined to take tough decisions early to eliminate friction and to avoid problems further down the line — because now is the time to embark on an innovative and sustainable capital market development programme that will established the Malaysian market as Asean's multinational marketplace of choice," he said.

"Going forward, I am determined to put our capital market in the best possible position to continue to drive Malaysia's economic growth and to put us a step ahead of the rest. We have made great strides with the various capital market reforms that we have introduced over the last few years and already they are making a big difference on the ground."

As part of the process of deeper economic integration within Asean, he said Bursa Malaysia, the Singapore Exchange and Stock Exchange of Thailand are connecting their markets via the Asean Trading Link to create a US$1.3 trillion virtual market.

He said this stronger trading platform will ensure Bursa Malaysia is best placed to face competition not only from technology but also from cross-border trading, dark pools and off-market platforms.

He also said the government will ensure that Malaysia's debt does not exceed 55% of the gross domestic product (GDP) through prudent management of the nation's finances.

He said the government has taken steps to reduce its fiscal deficit in line with its effort to ensure further growth. Last year, the fiscal deficit stood at 4.8% of GDP.

"Last year, growth in the Malaysian economy exceeded forecasts, expanding by a robust 5.1%, a trend that continued in the first quarter of this year as strong domestic demand and sustained trade saw our economy expand a further 4.7%," Najib said.