HK, Malaysia deepen capital market ties

Hong Kong and Malaysia have signed Memorandums of Understanding to facilitate listings of companies and mutual recognition of funds, as financial and accounting regulators from both sides gathered in Kuala Lumpur to deepen capital market linkages.

These MoUs signify a substantive step in regulatory cooperation with Malaysia to broaden cross-border investment channels and choices for investors in both markets, said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu at the signing ceremony.

It also underscores the shared commitment to promoting market development in Asia through enhanced connectivity, robust regulatory standards and strong investor protection, Hui said, adding that the growth opportunities for the two places are “substantial.”

Under the MoU signed by the Securities and Futures Commission and the Securities Commission Malaysia, the eligible product scope of mutual recognition of funds is expanded to include non-Islamic exchange-traded funds and leveraged and inverse – or short – products, as well as real estate investment trusts.

A simplified dual initial public offering listing framework was also established between the two markets, as Bursa Malaysia has been added to Hong Kong Exchanges and Clearing’s recognized stock exchange list, allowing companies primarily listed on the Malaysian bourse to apply for a secondary listing in the SAR.

Along with broadening investment choices and diversifying portfolios, the MoU is expected to drive a higher volume of cross-border investment flows between the two markets, the SC Malaysia’s executive chairman Dato’ Mohammad Faiz Azmi said at the ceremony, according to Malaysian national news agency Bernama.

The country is also seeking greater collaboration regarding professional industry standards, the chair was quoted as saying.

The two markets are well placed to complement each other as vital financial gateways connecting global capital respectively with the mainland and Southeast Asia, and will continue to strengthen the partnership to drive shared prosperity, said SFC’s chairman Kelvin Wong Tin-yau.

There are currently 30 Malaysian companies listed in Hong Kong, including Guoco Group, a flagship of the Malaysian conglomerate Hong Leong Group.

HKEX in March launched a co-branded index with Bursa Malaysia, which tracks the performance of the 30 biggest companies by market capitalization from each market. Thirty-three Hong Kong industry leaders, representing a diverse mix of financial institutions and over 80 percent of the local ETF and leveraged/inverse products market capitalization, witnessed the signing at the ceremony.

The Accounting and Financial Reporting Council and the SC Malaysia also signed an MoU at the ceremony to strengthen cooperation in the areas of audit oversight and financial reporting compliance.

Hui also met with Tan Sri Johan Mahmood Merican, the Secretary General of the Treasury, Ministry of Finance of Malaysia, and discussed areas for future collaboration, such as Islamic finance, during his four-day visit to Southeast Asia.

Meanwhile, the Hong Kong Trade Development Council said it will host a Think Business, Think Hong Kong event in Kuala Lumpur on August 11, bringing together business leaders, investors, innovators, professional service providers and policymakers to exchange insights, explore investment and business opportunities and forge new cross-border partnerships. In addition to a symposium, some 30 Hong Kong service providers and start-ups will feature their flagship products and solutions in the exhibition to create opportunities for collaboration with Malaysian participants, it added.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓