This article first appeared in The Edge Malaysia Weekly on January 26, 2026 - February 1, 2026

AN increasing number of young investors are shifting their capital to overseas markets, a trend accelerated by easier access to global trading platforms and the growing appeal of digital and alternative assets.

But to be clear, the shift also reflects long-standing structural issues in the local stock market, which many younger investors perceive to be stagnant and lacking in excitement. The launch of electronic trading platforms such as Moomoo and Webull in Malaysia has further intensified this pivot, given their low-commission-fee business model.

Among the key attractions of investing abroad are greater portfolio diversification, enhanced trading flexibility and deeper market liquidity. The US market, for instance, offers exposure to companies with stronger earnings potential, underpinned by global operations and scaleable business models.

Singular Asset Management founder and chief investment officer Teoh Kok Lin says the shift towards global market access has structurally altered the investing behaviour of young investors, who now have international markets at their fingertips.

“Why buy a stagnant local stock when you can purchase fractional shares in US tech giants?” he asks.

To address this challenge, Teoh suggests introducing more ringgit-denominated thematic exchange-traded funds, particularly those offering exposure to Asean technology and the global artificial intelligence (AI) segment.

“If we don’t offer the products investors want, they will trade elsewhere. Additionally, we must create a safer trading environment through rigorous enforcement against manipulation, ensuring retail investors are not the primary victims of speculative schemes.

“We need surgical regulation, not blunt force. Heavy-handed measures, such as frequent UMA (unusual market activity) queries or limit freezes, kill liquidity across the market. We need better surveillance technology, including AI-driven monitoring that distinguishes healthy speculation from predatory manipulation. As active managers, we want a market that moves, not one that is constantly halted,” he emphasises.

In pursuing growth in digital assets, industry players say success will depend less on speed and hype, and more on credibility, regulation and institutional readiness.

Ding Su Lynn, partner for corporate finance at Baker Tilly Malaysia, thinks Malaysia should position itself as a credible and well-regulated digital market hub, starting with institutional and qualified-investor products such as tokenised funds, bonds and sukuk.

“Innovation should be phased and well supervised. The aim is not speed, but innovation that improves transparency and efficiency without creating systemic risks,” she points out.

Minority Shareholders Watch Group (MSWG) CEO Dr Ismet Yusoff concurs, adding that the focus should be on practical tokenisation use cases, such as fund units, sukuk and private market instruments, where there is clear economic value and regulatory visibility.

“Regulators should enable innovation through phased adoption and sandboxes, while managing systemic risks through strong governance, custody, disclosure and prudential safeguards. The priority should be financial stability, investor protection and market integrity,” he stresses.

CGS International Securities Malaysia CEO Khairi Shahrin Arief Baki says the Capital Market Masterplan 4 (CMP4) presents the country a real opportunity to define its niche in digital assets, without the need to compete head-on with markets that are already far ahead in retail crypto trading or token speculation.

Instead, he says Malaysia should position itself around areas where it has natural comparative advantages, such as institutional-grade tokenisation, shariah-aligned digital assets and regulated digital market infrastructure.

“The real value is not in chasing hype, but in modernising capital-raising, settlement and product innovation through tokenised bonds, sukuk, fund units and real-world asset platforms. These are areas where Malaysia can lead regionally because we already have strong foundations in Islamic finance, a sophisticated bond and sukuk market, and a regulatory culture that prioritises investor protection,” he says.

Datin Wong Muh Rong, founder and managing director of Astramina Advisory Sdn Bhd, views tokenisation — when backed by real-world assets — as a constructive and lower-risk pathway for innovation. She notes that it can enhance transparency, facilitate fractional ownership and improve market access, while anchoring valuations to tangible or verifiable underlying assets.

However, she cautions that greater risks could arise when digital assets operate outside established regulatory oversight, particularly in areas involving fiat on-ramps, custody and settlement.

“When tokenisation, stablecoins or digital securities bypass oversight by authorities such as Bank Negara Malaysia, the ecosystem can become highly speculative and vulnerable to misuse, including money laundering, terrorist financing and other illicit activities. These risks underscore the need for close coordination between regulators and a robust regulatory perimeter that ensures all key touch points — issuance, trading, custody and fiat conversion — remain subject to appropriate supervision,” she observes.

Nonetheless, Wong is of the view that the CMP4 should allow for “controlled experimentation” within clearly defined regulatory frameworks such as regulatory sandboxes and phased licensing regimes, as the development of alternative digital assets, including tokenised instruments and stablecoins, represents an important evolution of the capital market.

Tradeview Capital Sdn Bhd CEO Ng Zhu Hann proposes that Malaysia proceed, albeit with caution. He stresses that tokenisation, stablecoins and digital securities should only be explored when the local bourse’s fundamentals are solid and pertinent issues have been addressed.

“If our fundamentals are not sound and the market’s full potential is not yet realised, why venture into something beyond our current capacity and aptitude? These should not be the focus, at least not at this juncture,” he opines.

The central bank has said that a discussion paper will be issued to provide guidance on developing tokenisation use cases and safeguards to support responsible exploration and adoption.  

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