This article first appeared in The Edge Malaysia Weekly on January 26, 2026 - February 1, 2026
THE Capital Market Masterplan 3 (CMP3), which spanned 2021 to 2025, was designed as a comprehensive blueprint to strengthen Malaysia’s capital market by improving fundraising efficiency for companies at different stages of growth and supporting their long-term competitiveness.
Its ambitions were broad — from widening financing access for small and medium-sized enterprises (SMEs) and mid-tier companies (MTCs) to empowering investors through more diverse products and enhanced retirement security, while embedding environmental, social and governance (ESG) principles and Islamic social finance into the market’s foundations.
Industry experts say, however, that more needs to be done to meaningfully deepen market vibrancy.
Datin Wong Muh Rong, founder and managing director of Astramina Advisory Sdn Bhd, says the CMP3 achieved 65% to 70% of its key targets but she notes that significant gaps remain, particularly in extending financing options for SMEs and MTCs.
While there has been encouraging progress in digital financing, especially via equity crowdfunding (ECF) and peer-to-peer (P2P) platforms, Wong observes that these innovations have generated minimal spillover into the LEAP Market, owing partly to structural constraints.
“The LEAP framework should place greater accountability and responsibility on sponsors, given its role as a feeder market, while simultaneously allowing more liberal entry and licensing of qualified sponsors, including existing licensed corporate finance advisers and reputable regional players,” she says. “Sponsor credentials and track records should also be transparently disclosed on a regional basis to strengthen governance and investor confidence.”
She adds that further liberalisation of the LEAP Market is warranted, including allowing retail investor participation after an initial “seasoning” period of one to two years. Currently, the LEAP Market is accessible only to sophisticated investors, who are deemed to have a better understanding of the potential risks and returns associated with this segment. These investors are required to meet specific eligibility criteria, including holding total assets of more than RM3 million.
Similarly, Tradeview Capital Sdn Bhd CEO Ng Zhu Hann notes that financing options for SMEs and MTCs have fallen short, particularly on the equity investment front. While there has been significant disbursement through P2P platforms, most ECF platforms are either dormant or inactive, with only three to four playing a meaningful role.
Ng also points out that low trading activity and the lack of retail participation have rendered the LEAP Market inefficient for fundraising and price discovery, despite the enlarged pool of advisers dedicated to this market.
Currently, Malaysia’s capital market is supported by 19 recognised principal advisers (RPAs), comprising mainly 11 licensed investment banks. Astramina’s Wong notes that although boutique corporate finance advisory firms operate under the Capital Markets Services Licence (CMSL), their ability to act as RPAs or sponsors remains limited. She argues that faster and deeper liberalisation — particularly in expanding the pool of RPAs and LEAP Market sponsors — is critical to strengthen engagement and accountability among capital market practitioners.
For perspective, Wong highlights that Bursa Malaysia has at least 58 listed companies per RPA, compared with around 30 listed firms per RPA on the Singapore Exchange.
Teoh Kok Lin, founder and chief investment officer of Singular Asset Management, says the CMP3 has succeeded in “democratising” access to listings, citing the vibrancy of the ACE Market as evidence that the SME “funding escalator” is finally moving.
“We have established a healthy pipeline of companies transitioning from private to public markets, which is fundamental for ecosystem diversity,” he says, but cautions that these companies have not remained sufficiently visible to investors as they continue to rely heavily on bank financing for working capital. Secondary market liquidity for small-cap stocks also remains shallow.
“Effectively, we have built the launchpad but have yet to foster the sustainable ecosystem of research coverage and trading volume needed to support these companies over the long term,” Teoh adds.
Baker Tilly Malaysia partner for corporate finance Ding Su Lynn believes there has been no fundamental improvement in market depth, particularly in deepening the public equity market.
“Despite streamlined rules, there was no sustained pipeline of strong mid-tier listings or a meaningful improvement in liquidity. Institutional participation remained narrow and several structural reforms — such as dual-class shares — did not materialise,” she observes.
Nonetheless, Ding acknowledges that the CMP3 succeeded in expanding funding pathways, particularly outside traditional IPOs, while strengthening Malaysia’s sustainability and Islamic capital market credentials through improvements in market infrastructure and regulatory frameworks.
Minority Shareholders Watch Group (MSWG) CEO Dr Ismet Yusoff points to structural issues — such as weak market vibrancy, low free float, modest growth, declining profit margins and low returns on equity — that suppress liquidity and valuations.
“Retail investors, especially younger and more tech-savvy participants, are increasingly pivoting to overseas markets, leaving Bursa Malaysia in a tricky position that perennially relies on local institutions to drive value and volume,” he cautions.
While he acknowledges that the CMP3 strengthened the foundations of the capital market ecosystem, he emphasises that behavioural and structural reforms are needed to translate improved frameworks into a more vibrant and dynamic market.
Datametrics Research and Information Centre (DARE) managing director Pankaj Kumar says regulators need to enhance their ability to detect market manipulation, noting that “some less obvious practices” are conducted through various share issuance schemes.
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