The Securities Commission Malaysia (SC) has on Thursday signed a memorandum of understanding (MoU) with Khazanah Nasional Berhad (Khazanah) via Dana Impak Fund to increase access to funding and familiarize the capital markets for Malaysian mid-tier companies (MTC) to further catalyze their growth and expansion.

The duo said in a statement that the MoU supports the SC’s ‘Catalyzing MSME and MTC Access to the Capital Market: 5-Year Roadmap (2024-2028)’ (MSME and MTC Roadmap).

The SC Chairman Mohammad Faiz Azmi said Khazanah’s support of the MSME and MTC Roadmap and SC’s long-term goal will ensure a more inclusive and holistic capital market fundraising ecosystem.

“MTCs are significant domestic employers and economic contributors. However, they have been identified as the ‘missing middle’, as they often face difficulties in accessing financing for growth,

“This MOU will address such challenges to ensure sustainable growth and resilience,” he added.

According to the statement, MTCs make up less than 2 percent of firms in Malaysia but contribute 36 percent of Malaysia’s gross domestic product (GDP) and 16 percent of employment.

This presents a significant driving force for the Malaysian economy, and potential demand pool for the capital market.

Khazanah Managing Director Dato’ Amirul Feisal Wan Zahir said that the fund is committed to empowering Malaysian companies and MTCs by providing them with the opportunities they need to excel.

According to him, Khazanah, through Dana Impak which is a key pillar under its Advancing Malaysia strategy, has earmarked an initial MYR 500 million ($116 million) to provide funding to MTCs.

This funding will be directed to high-potential MTCs via the private markets, be it private equity or private credit funds, ensuring greater access to capital, he noted.

He also highlighted that one of the key pillars for Khazanah’s “A Nation that Creates” framework is in catalyzing future ready industries and talents, anchored on transforming firms of different sizes to derive greater value creation, while increasing national productivity and global competitiveness.

“The objective is also to establish Malaysian companies that continue to create and innovate, with persistent growth momentum and economic resilience,

“We look forward to our collaboration with the SC, to support MTCs to be well-positioned to contribute substantially to the nation,” he added.

Through mutual co-operation, the MoU will focus on measures to support MTCs’ next phase of growth and innovation, and joint programs and initiatives to increase their awareness and access to the capital market.

This includes fundraising incubation for 60 – 100 MTCs to enhance capital market-readiness; specialised MTC capacity-building programs to raise MTC competitiveness and
innovative capacity; greater MTC-focused investments to spur this growth segment.

Under this MOU, Khazanah will also implement capacity- building programs with key partners such as the SC to drive productivity improvements and unlock new opportunities
in business, innovation and funding including market-based financing solutions.

The aim is to build a strong pipeline of capital market-ready MTCs, including upskilling a pool of selected MTCs on fundraising requirements via the Elevate program by the SC
affiliate Capital Markets Malaysia, and enhancing their growth innovation capabilities.

These initiatives are consistent and in line with the ambition of the MSME and MTC Roadmap and the GEAR-uP program, said the statement.

The SC is the sole regulatory agency for the regulation and development of capital markets in Malaysia.

The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Capital Markets and Services Act 2007.

Khazanah is the sovereign wealth fund of Malaysia entrusted to deliver sustainable value for Malaysians.

In line with its long-term strategy of Advancing Malaysia, the fund aims to deliver its purpose by investing in catalytic sectors, creating value through active stewardship, increasing its global presence, as well as building capacity and vibrant communities for the benefit of Malaysians.

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