The Mid and Small Cap (MidS) Research Scheme was launched today with the aim of elevating the profile of mid and small-cap companies, and further spur the vibrancy of this potentially high growth market segment. Under this Scheme, an inaugural batch of 100 mid and small-cap public listed companies (PLCs) will receive independent analyst coverage by licensed research houses.
At the launch ceremony held today, Second Finance Minister YB Datuk Seri Johari Abdul Ghani said, “The MidS Research Scheme is intended to enhance investors’ awareness as well as giving due recognition to the mid and small-cap companies that have been generally under-researched. We are cognizant of the fact that there are many hidden gems among these companies that have yet to be revealed. The research scheme will allow investors to explore opportunities within the mid and small-cap stocks, thus increasing trading interest and liquidity of mid and small-cap companies.”
The MidS Research Scheme was initiated with the primary objective of creating better value recognition of mid and small-cap companies as they form an important segment of the listed equity asset class within the overall capital market.
Securities Commission Malaysia’s Chairman Tan Sri Ranjit Ajit Singh said, “The Malaysian capital market plays a key role in facilitating the growth of businesses and the economy as it bridges the funding and investment needs of issuers and investors respectively. This Scheme aims to enable mid and small cap PLCs to substantially realise their growth potential by attracting greater investor participation and thus achieving better value recognition. It is one of many initiatives undertaken to contribute towards a more diverse and dynamic capital market environment and further enhance the overall ecosystem."
Bursa Malaysia Chairman Tan Sri Amirsham A Aziz said, “There is great potential to be discovered in the mid and small-cap companies. The recent performance by the related indexes are testament to this. In the first quarter of this year, the FTSE Small Cap Index grew by 16.0 percent, while the FTSE Mid Cap Index increased by 11.6 percent. This proves that mid and small-cap stocks can offer attractive returns to investors. More importantly, they can offer a good alternative investment and ensure diversification strategy for all investors. The MidS Research Scheme will be beneficial to the long-term growth potential of Malaysia’s capital market. This Scheme is only the beginning of many more initiatives that we plan to embark on to remain relevant and appealing to market participants.”
The Scheme has received active industry support and participation. It will commence with 22 research houses that have committed to provide research coverage for eligible PLCs. Each eligible PLC will be assigned two research houses, further improving the dissemination of the research, including to retail investors, so as to attract more investor participation in the segment. Selected PLCs underwent a screening process encompassing both qualitative and quantitative criteria, and represent a market capitalisation range of RM200 million to RM2 billion.
A Task Force chaired by the Securities Commission Malaysia (SC), comprising representatives from Bursa Malaysia Berhad (Bursa Malaysia), Kumpulan Wang Persaraan (Diperbadankan) (KWAP), Malaysian Investment Banking Association (MIBA) and Association of Stockbroking Companies Malaysia (ASCM), was established to oversee the implementation of this Scheme. The Task Force also provides strategic direction to actively promote the small and mid-cap market segment.
Apart from the Task Force’s recommendations on the MidS Research Scheme, other efforts to promote the vibrancy and ensuring the success of this high growth segment have been instituted. To this end, Government-linked investment companies have committed additional allocation towards investing in mid and small-cap PLCs.
In addition, two new indices - the FTSE Bursa Malaysia MidS Cap Index and FTSE Bursa Malaysia MidS Cap Shariah Index – were introduced as part of initiatives to track performance and generate more interest for capital market products for this segment.
Moving forward, an independent review panel, comprising representatives from the SC, Bursa Malaysia, industry and institutional investors, will meet on a periodic basis to review and ensure the quality of the research reports.
For more information on the Mid and Small Cap Research Scheme and list of eligible PLCs, please visit www.bursamids.com
