KUALA LUMPUR (Sept 22): Public Investment Bank Bhd said today Malaysia’s five-year Capital Market Masterplan 3 (CMP3) for 2021 to 2025 is very much a framework and work-in-progress for the coming five years and that the scheme will continue to strengthen the country’s capital market, which has expanded to RM3.4 trillion at the end of 2020 from RM2 trillion at the start of 2011.
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“In the present however, the Malaysian capital market (equities in particular) will continue to be dominated by political and Covid-19 related developments,” Public Investment’s research team wrote in a note today in response to the CMP3, which the Securities Commission Malaysia (SC) unveiled yesterday.
SC chairman Datuk Syed Zaid Albar said in the CMP3 document that the scheme aspires for a capital market and a supportive ecosystem that works for the collective benefit of all.
“Strategic initiatives over the next five years will be guided by six key development and regulatory priorities. These strategic thrusts focus on catalysing competitive growth, empowering investors for a better future and shaping a stakeholder economy, while simultaneously embedding shared accountability, prioritising efficiency and outcomes, as well as embracing technology,” Syed Zaid said.
Today, Public Investment said that while there appears to be some measure of peace on Malaysia’s political front for now and some manner of improvement in the domestic pandemic situation with the number of new cases declining on a daily basis, albeit still high, the stock market has not kicked-off from the 120-point gain seen in early August.
According to Public Investment, the FBM KLCI has surrendered 70 of that 120-point gain to now hover at the 1,530-point mark.
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“The market will continue to be very much a trading-oriented one for now, though it is encouraging to note that foreign investors have been net buyers in recent weeks, suggesting regional investor flow potentially picking up in momentum as the country’s growth prospects continue to strengthen.
“From a medium- to longer-term perspective, the market still appears attractive, currently trading at around 1-standard deviation below the price-earnings averages. We continue to be advocates of buying on weakness, in anticipation of a rebound in 4Q 2021. We maintain our KLCI year-end 2021 closing at 1,590 points,” Public Investment said.
Meanwhile, AmBank (M) Bhd chief economist Dr Anthony Dass and economist Muhamad Farid Anas Johari wrote in a note today that AmBank believes a successful implementation of the CMP3 over the next five years will put Malaysia on a higher pedestal among global capital markets.
“Our market will continue to be competitive and attractive in the changing global trend as we become more efficient, diversified, and relevant.
“With greater efficiency and a more inclusive and diverse capital market, Malaysia would be able to garner more investor interest and better valuations, and these in turn would benefit our businesses and the economy,” they said. -The Edge Markets