Malaysian Financial Market Developments
Investing in the Malaysian Financial Market
A well-functioning financial market plays a critical role in the development of a country's real economy. This is even more important for highly open economies like Malaysia, where the exchange rate is an important element in trade and investment. Bank Negara Malaysia continually undertakes initiatives to broaden and deepen the Malaysian financial markets. With its multi-dimensional strategies and initiatives, Bank Negara Malaysia aims to reset the direction of the onshore market, strengthen the pillars of the onshore financial markets as well as enhance the market resiliency.
What's new for investors?
The AOO pilot programme was introduced to provide additional flexibilities for these AOOs to facilitate efficient pricing of ringgit transactions with non-resident investors after onshore trading hours, particularly London and New York hours.
List of AOOs under the programme:
- Bank of America
- BNP Paribas
- CIMB Bank
- HSBC Bank
- JP Morgan Chase
- Standard Chartered Bank
List of financial institutions under the Appointed Overseas Office Framework
This list highlights all the licensed onshore banks in Malaysia, both local and foreign banks, custodian banks both local custodians and global custodians as well as international central securities depositories that can be approached by investors for access to the Malaysian financial market, apart from the Appointed Overseas Offices (AOOs) available globally to facilitate investors.
This document is an industry-led initiative, aimed at promoting greater market efficiency. This standard documentation guide aims to streamline minimum due diligence processes by banks to improve transparency, document requirements and enhance investors’ experience.
The 2020 Government Bond Auction Calendar incorporates new key features to enhance the liquidity in the financial market and ensure a balanced growth in the Malaysian Government Securities (MGS) and Malaysian Government Investment Issue (MGII) bond market:
Larger benchmark bond sizes through more frequent re-openings
- Most of the benchmark bonds will be re-opened from existing bonds, with only 4 new issuances in 2020 compared to 12 in 2019.
- Larger outstanding bond sizes are expected to provide a boost to trading liquidity, particularly off-the-run bonds, which will narrow the bid-ask spreads and facilitate the index-tracking activities.
A balanced supply of MGS and MGII
- For 2020, there will be 17 auctions for each MGS and MGII across the entire maturity spectrum. This will meet the needs of all classes of investors and diversify the investor base further.
Well-spread supply throughout the year
- On average, there will be 2 to 3 auctions per month in 2020 with the most number of auctions taking place in March 2020 (4 auctions). This will ensure sufficient supply of MGS and MGII throughout the year.
Click here to view the 2020 Government Bond Auction Calendar