Solid agenda will foster capital mart’s sustainable growth, says Bursa chief

THE 2017 Budget has set a solid agenda that will help foster sustainable growth of the local capital market, said Bursa Malaysia Bhd chief executive officer Datuk Seri Tajuddin Atan.

The proposed research scheme for smalland mid-cap listed companies and the government-linked investment companies’ (GLiCs) RM3 billion special fund should create a sustainable ecosystem to promote the visibility and vibrancy of the 300 companies, he added.

“Both these announcements are opportune as we have a ready pool of small- and mid-cap companies that could benefit from these programmes.

“By increasing visibility and accessibility through both research coverage and sales distribution, local institutions, retail investors as well as foreign funds will find it easier to invest in these companies,” Tajuddin said in response to the budget announcement yesterday.

“The special fund that will be allocated by GLiCs will certainly be an added boost for these companies as there will be a greater pool of investors that these companies can tap into,” he added.

Malaysian Industrial Development Finance Bhd group managing director Datuk Mohd Najib Abdullah said the RM3 billion fund to invest in potential small- and mid-cap companies will boost the trading activities in these counters and help rejuvenate liquidity and sentiment in Bursa.

“Traditionally, much focus is on the 100 top companies listed on Bursa and this new fund will enable the investment companies to seek better capital returns and yields. This will unlock the value of small cap companies,” Mohd Najib added.

He said the research scheme was also positive for small- and mid-cap stocks because many of these companies are under-researched.

“The scheme is expected to increase the exposure and visibility of these 300 companies and benefit the investors, as it could help to unearth numerous ‘hidden gems’ among the generally under-researched small as well as mid- cap listed companies.”

Mohd Najib said MIDF Group, through MIDF Research, is looking forward to participate in the scheme.

Meanwhile, Standard Chartered Bank Datuk Seri Tajuddin Atan Malaysia Bhd managing director and chief executive officer Mahendra Gursahani said the bank welcomed the extension of the period of income tax exemption for entities carrying out Islamic banking and takaful business through the International Currency Business Unit (ICBU) in foreign currencies as well as stamp duty exemption on instruments of such activities.

During the tabling of the 2017 Budget, Prime Minister Datuk Seri Najib Razak said the period of income tax exemption to entities carrying out Islamic banking and takaful business through ICBU in foreign currencies as well as stamp duty exemption on instruments of such activities will be extended to the year of assessment 2020.

He said the initiative is part of the government’s effort in maintaining Malaysia as an international Islamic financial centre.