Capital market push

HONG KONG, 24 JULY 2026 —

Malaysia is set to bolster its drive to attract higher-quality investments by leveraging on Hong Kong's financial markets to help fund high-value industries and major infrastructure projects. This move is part of a new phase of bilateral capital market cooperation between the two countries. According to Treasury secretary-general Tan Sri Johan Mahmood Merican, stronger capital market connectivity will support Malaysia's economic ambitions, particularly in the electronics sector where the country is trying to move beyond its traditional role in manufacturing and assembly towards higher-value design.

On the issue of investment incentives, Johan noted that the government has realized that its previous approach was overly simplistic, with broad-based incentives often focused on attracting large capital investments. In the case of data centres, for example, the government has come up with a new investment framework that assesses whether a project contributes to economic complexity, creates high-value-added jobs, and delivers advantages for businesses. This new framework is almost like a scorecard, ensuring that investments are aligned with national objectives. Details on the specific criteria used in the scorecard are not yet available, but it is expected to provide a more nuanced approach to investment incentives.

The Securities Commission (SC) and Hong Kong's Securities and Futures Commission (SFC) have signed a memorandum of understanding (MoU) on the mutual recognition and cross-listing of covered funds, particularly exchange-traded funds (ETFs) and real estate investment trusts (REITs). The MoU will also strengthen regulatory cooperation to facilitate a simplified dual initial public offering (IPO) listing framework between the two jurisdictions. This initiative supports the Capital Market Masterplan 2026 to 2030's aspiration to position Malaysia as a Gateway to Regional Opportunities through stronger regional connectivity and enhanced cross-border investment flows. The Stock Exchange of Hong Kong Ltd has added Bursa Malaysia Securities Bhd to the list of Recognised Stock Exchanges (RSEs), enabling public limited companies listed on Bursa Malaysia to apply for a secondary listing in Hong Kong.

The simplified dual IPO listing framework will allow issuers seeking simultaneous primary and secondary listing to use a single set of submission documents, including the prospectus. This framework is expected to come into effect in September 2026. Under the MoU, the range of products eligible under the mutual recognition of funds has been expanded to include ETFs, including futures-based ETFs, leveraged and inverse ETFs, and commodity ETFs. The mutual recognition of funds also includes facilitating the cross-listing of REITs in each jurisdiction. The SC has also entered into a separate MoU with Hong Kong's Accounting and Financial Reporting Council (AFRC) to facilitate information sharing, supervisory assistance, and coordination on financial reporting compliance and audit oversight matters.

According to Hong Kong's secretary of financial services and the treasury Christopher Hui, Hong Kong has enormous synergy with Malaysia as a strategic economic partner. Hui noted that Hong Kong could serve as an "international agent" for Malaysia in finance, given its strengths in terms of financial products, investors, and growth. The collaboration between the two countries is expected to broaden Hong Kong's economic base by embracing technology and attracting more industries. Hui also highlighted the importance of working together to leverage the advantages and synergies that can be created among Asian economies, particularly in the context of shifting global economic dynamics.

The MoU collaborations come at an opportune time as Asian economies seek closer cooperation amid shifting global economic dynamics. Hong Kong is undertaking reforms to strengthen the competitiveness of its capital markets, including introducing measures to attract more technology companies to its market. According to Hui, technology is really the driver of the economy, and many technology companies are increasingly interested in utilizing Hong Kong's capital market. The collaboration between Malaysia and Hong Kong is expected to provide a win-win proposition, with both countries benefiting from the deepening of capital market collaboration.

Looking ahead, the collaboration between Malaysia and Hong Kong is expected to have a positive impact on the regional economy. With the simplified dual IPO listing framework and the expansion of mutual recognition of funds, companies in both countries will have greater access to capital and investment opportunities. The partnership is also expected to attract more foreign investment into the region, driving economic growth and development. As the global economic landscape continues to evolve, the importance of regional cooperation and collaboration will only continue to grow, and the partnership between Malaysia and Hong Kong is well-positioned to capitalize on these trends. Details on the specific impact of the collaboration on the regional economy are not yet available, but it is expected to be a key driver of growth and development in the coming years.

Related: SkyeChip Bhd · Securities Commission · Tan Sri Johan Mahmood Merican · Hong Kong