Prime Minister Datuk Seri Anwar Ibrahim has announced that the government will reduce the stamp duty rate for shares traded on Bursa Malaysia back to 0.1% of the contract value from July 2023 onwards. This is subject to a maximum cap of RM1,000 per contract.

According to the prime minister, this reduction is aimed at directly reducing the cost of securities transactions, which in turn, will lead to a more competitive Malaysian stock market.

“I am confident that this step will stimulate the market and enhance its attractiveness. The increase in market liquidity will attract more domestic and foreign funds into the Malaysian stock market, thereby encouraging SMEs to pursue initial public offerings (IPOs) and facilitating public listed companies in raising funds to expand their businesses and create more job opportunities,” said Datuk Seri Anwar during the launch of the Securities Commission’s capital market graduate programme.

For context, investors and traders are currently required to pay a stamp duty rate of 0.15% of the contract value, which itself was actually raised from the previous rate of 0.1% back in early 2022. Prior to 2022, the stamp duty cap was also set at a lower RM200, with the current RM1,000 cap introduced when the stamp duty rate was increased to 0.15%.

When announcing the updated stamp duty rate for shares trading, Datuk Seri Anwar also commented that this initiative is one of several measures that are meant to support three pillars that will enhance the capital market, thereby driving greater economic growth, inclusion, and sustainability for the nation. Specifically, the three pillars – which were identified by the Securities Commission (SC) – include:

• Creating market vibrancy with greater participation opportunities for the people
• Attracting more investors to support financing for SMEs and the New Economy
• Implementing market and structural reforms to enhance Malaysia’s competitiveness and strengthen market confidence

Another measure that the government also hopes to implement soon include getting the SC and Bursa Malaysia to roll out reforms to the IPO (initial public offering) process within the year, so that it’s easier for businesses to list on the exchange.

Additionally, the Ministry of Finance and the SC will expand the definition of sophisticated investors to include more categories, such as angel investors, venture capitalists, and private equity firms. Briefly, sophisticated investors refer to high-net-worth individuals or entities with enough experience that qualify for certain benefits and opportunities.

There are also plans to draft and update policies to facilitate and attract the setting up of family offices in Malaysia, said Datuk Seri Anwar. This refers to investment funds that manage the financial assets of a family

“Any reform requires discipline and patience. It also requires confidence to do new things and make difficult decisions for the benefit of the people and the nation,” Datuk Seri Anwar stressed, noting that these steps are necessary to restore confidence in Malaysia’s dynamism and competitiveness.

(Sources: The Star, Malay Mail)

• TAGS:
• Bursa Malaysia
• Datuk Seri Anwar Ibrahim
• Securities Commission
• Securities Commission Malaysia
• Share Stamp Duty Cap
• Share Stamp Duty Rate
• Stamp Duty