New measures positive to Malaysia’s capital market and Bursa

Najib announced a slew of measures that would be implemented to further stimulate vibrancy in the capital market.

KUCHING: The new measures announced by Prime Minister Datuk Seri Najib Tun Razak during the World Capital Market Symposium 2018 will have an overall positive impact on Malaysia’s capital market as well as its bourse; Bursa Malaysia Bhd (Bursa Malaysia), analysts observed.

On Tuesday, Najib announced a slew of measures that would be implemented to further stimulate vibrancy in the capital market.

These measures included liberalising margin financing rules to make the local market more attractive, allowing intraday short-selling to all investors, and adding a new category of traders known as ‘trading specialists’ who could trade on their account.

At the sane event, the Securities Commission Malaysia (SC) and the Monetary Authority of Singapore (MAS) also announced that they would work together to facilitate the establishment of a stock market trading link between Bursa Malaysia and the Singapore Exchange (SGX) by year-end.

Following the announcements, Bursa Malaysia made a strong start on Wednesday, rising to RM11.30 at 9.30am, from its opening price of RM10.80.

“The new measures introduced were seen as a positive development for Bursa Malaysia to boost its functions as the local stock exchange.

“Notably, the establishment of trading link between SGX and Bursa Malaysia will open doors for investors to access both stock markets, to trade and settle shares in a more convenient and cost-efficient manner,” the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said in a report.

It further highlighted that the linking of both stock market trades could see the trading of more than US$1.2 trillion in value and about 1,600 listed companies.

“As of this writing, we believe around 57 per cent of the combined listed entities are currently traded on Bursa Malaysia,” the research team opined.

Moving forward, it believed that the trading link would make it more convenient for investors to trade shares in the other stock market, and settle in local currency.

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