The long-awaited Capital Market Masterplan 2026 to 2030 (CMP) was released with key details as to how the regulators see the Malaysian capital market developing over the next five years. Governance took centre stage in the new CMP. Malaysia hopes to be regional leader in responsible investment, focusing on the environment, social, and governance framework. In addition, Malaysia will continue to play a leading role in promoting syariah-compliant and socially responsible investments.
CMP has outlined an ambitious plan, with the capital market expected to hit between RM5.8 trillion and RM6.3 trillion by 2030, from just RM4.3 trillion at the end-2025. Having recorded a compounded annual growth rate (CAGR) of 5.1% between 2021 and 2025, led by a strong 6.6% growth in the value of total fixed income securities outstanding, strategies outlined in the new CMP are expected to see the capital market growing at a CAGR of between 6.1% and 7.9% over the next five years, which is indeed a tall order.
Source: https://ms.wikipedia.org
Based on input from the industry and various stakeholders, CMP can be said to be a holistic blueprint that is razor-focused on capitalising on Malaysia’s strengths in driving Islamic capital market, sustainability-related investments, and modern investment themes or tools.
The CMP recognises global trends, evolving demographic changes, and economic transformation. The key in the CMP is how the capital market can be a critical enabler that will transform Malaysia to be more prosperous in the identifiable high-growth areas such as advanced manufacturing, green technology, digital economy, and others.
Based on the current assessment, the retail market participation is at just 25% and is not reflective of an inclusive society, where the level of market participation should be higher. According to the Securities Commission (SC), 60% of non-investors are below the age of 40, and this reflects the lack of financial market awareness. Lack of trust has been cited as the main reason, as investors fear being scammed. Indeed, there is a greater need to raise the level of awareness and education when it comes to financial literacy.
The current generation has different life objectives when it comes to investments, as well as the manner and type of investments they are focusing on. The lack of market participation and trust in the capital market is also evident by the large amount of retail deposits in the banking system, with modest returns in the form of low-yielding assets. Under the CMP, the SC is looking to reshape how individuals are engaged, incentivised, and supported throughout their financial journey. This requires early engagement with individuals in their working lives to drive the level of participation, followed by efforts to improve long-term retention with a view to helping more Malaysians achieve financial resilience and retirement sufficiency.
The key is not only engaging individuals at their respective workplaces but also making financial literacy a part of primary and secondary education, similar to how some subjects are taught in schools.
One of the key incentives in CMP is the MY Value Up programme that could help raise listed companies’ profiles in terms of key financial matrices, which, among others, include total shareholder returns and return on invested capital. The CMP also calls for the publishing of annual key performance indicator (KPI) scores.
The objective here is to address mispricing for undervalued companies, restoring investors’ confidence via structured turnaround plans and improving liquidity for low-velocity listed companies, which will generate greater investor participation.
The SC also
suggested looking at enhancing its statutory powers to direct and oversee
exits.
In this regard, the focus should be on improving the current Malaysian Code on Takeovers and Mergers, where independent advisers have taken a very narrow view, whereby an offer is deemed reasonable although it may not be fair. An offer cannot be reasonable if it is not fair.
Another is to increase participants and/or players as intermediaries in the marketplace. For example, over 50 years, it is the merchant or investment banks that have monopolised submissions to SC. It is time for qualified Corporate Finance Advisors to act in a similar capacity. In the end, quality will determine success of approval.
Overall, the CMP is a holistic blueprint that will take the Malaysian capital market to the next level and anchor the role it plays in nation-building, as well as promoting growth, inclusivity, and sustainability.
Reference:
Execution is key to CMP, Pankaj C. Kumar, The Star,
4 Apr 2026
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