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Financial Services

Malaysia, being a medium-sized and an open economy, naturally has a financial sector which is highly attuned to global trends. Within that context, the Malaysian financial industry has prudential regulation which is designed to ensure broad financial and macroeconomic stability.

Malaysia has also followed global trends towards the internationalisation of financial services, resulting in the creation of pools of liquidity in financial centres.

In view of this fluid landscape for financial services, the Malaysian industry remains on track to achieve the Financial Service NKEA’s targets to grow the industry’s GNI contribution to RM180.2 billion and create 275,400 jobs by 2020.

A Note From the Minister

As one of the most developed financial services industries in the region, I believe our industry is well-placed to continue contributing to the development of our country while supporting our rakyat’s needs for financial security as well as wealth creation and preservation.

EPP Highlights
EPP 1: Revitalising Malaysia's Equity Markets

In 2014, in line with our efforts to build a sustainable marketplace, Bursa Malaysia continued to capitalise on Malaysia’s fundamental strengths, including tapping into its expanding young, educated working population, as well as adapting to the challenges and opportunities presented by ASEAN Economic Community (AEC) 2015 and the integration of ASEAN nations.

KEY TAKEAWAYS
The establishment of the ASEAN Economic Community planned for the end of 2015 will heighten competition in the equity markets as regional exchanges race to attract investors and listings. In order to remain a preferred investment destination, Malaysia must continue increasing the number of investment products offered while enhancing accessibility to the market.

Efforts must also continue in attracting the new generation of investors and opening up the market for retail investing.

EPP 3: Transforming Development Financial Institutions (DFIs)

The DFIs play an important role in ensuring continued support to the key strategic economic sectors. In order to provide a comprehensive regulatory and supervisory framework to ensure safe and sound management of the DFIs, the Development Financial Institutions Act 2002 (DFIA) was enacted.

KEY TAKEAWAYS
The role of DFIs in serving specialised sectors is important to support Malaysia’s socio-economic objectives, while complementing the broad financial market. The DFIs must however remain abreast with market needs, especially in supporting new growth areas by facilitating the reach of financing to these sectors, which include agriculture.

EPP 5: Insuring Most, If Not All, of Our Population

Throughout 2014, extensive engagements with key stakeholders were held to ensure effective implementation of the proposed initiatives under the framework and to ensure that the interests of various stakeholders are aligned and safeguarded. The framework is expected to be finalised in 2015.

KEY TAKEAWAYS
Given the backdrop of rising incomes and varying consumer needs, the insurance and takaful sector will continue to evolve and provide a strong value proposition to meet the needs of the consumers.

As the insurance and family takaful penetration is reported at 54 per cent, there remain untapped potential and opportunities to be reaped within Malaysia’s domestic market.

  • 1
    Revitalising Malaysia's Equity Markets
  • 3
    Transforming Development Financial Institutions (DFIs)
  • 5
    Insuring Most, If Not All, of Our Population
KPI Achievement 2014
  • Method 1 121%
  • Method 2 93%
  • Method 3 75%
Business Opportunities 2015
  1. Investment Banking Key Growth Drivers
  2. Other Segments including DFIs
  3. Commercial Banking
  4. Insurance and Takaful
  5. Growing Viability of Micro-insurance Asset and Wealth Management
Critical Target 2015
  1. Widening financing avenues - Launch of Islamic equity crowdfunding platform
  2. Increase in value of new listing
  3. New products and offerings for Malaysia’s equity markets
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