2. Capital Market
5. Politics and Development
A country’s economic growth is often regarded as the catalyst for stock market growth. Over the years, the stock market in Malaysia has developed into one of the fastest growing markets in the region (Ang 2009). The Malaysian economy ensures that the stock market is well structured as this will stimulate investment opportunities in the long run by recognizing and financing productive projects that leads to economic activity, allocation of capital proficiency and facilitation of exchange of goods and services (Mishkin 1998). In the Malaysian economy, stock markets play an important role by changing investments according to what is needed and it is the avenue where the public savings are generated to industries and business enterprises.
The capital market serves as an avenue for buyers and sellers to engage in the trade of financial securities, which consists of a primary and secondary market. A primary market allows investors to purchase financial products directly from an individual whereas the secondary market is a venue for business between investors.
For instance, the capital market laws were amended to encourage innovation and promote market efficiency. The amended law provides issuers with avenues to better optimize their capital structure and raise finance at competitive costs in meeting their business needs. Simultaneously, investors will benefit from broader choice of options to match their investment profiles and risk appetite. This new structure enhances consent efficiency without compromising investor protection because the new structure differentiates listed and unlisted capital market prod...
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... and number of issues.
Malaysia is known in leading the Islamic fund management companies and Islamic stock-broking companies that offer Islamic fund management and stock-broking services. The ICM in Malaysia is remarkable, two main reasons have been identified that support the emergence of this market are the 1997 Asian Financial Crisis, and the liquidity problem that arose because of the availability of surplus funds in the Islamic finance industry (IOSCO, 2004).
Besides that, the issuance of licenses to foreign Islamic financial instituitions promoted healthy competition and added to the dynamism of the Islamic financial industry. Malaysia’s ICM market grew deeper over the years as multinational corporations found Shariah-complaint products such as sukuk to be an attractive means of raising capital (Malaysia International Islamic Financial Centre 2014).
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