OBG talks to Tajuddin Atan, CEO, Bursa Malaysia

Interview: Tajuddin Atan

What plans are there to attract more global investor funds and increase the overall investor base?

TAJUDDIN ATAN : This region is viewed as the world’s leading growth market. That provides great potential for us to attract funds as Bursa Malaysia embraces our role as a primary driver of the ASEAN capital market and provide growth opportunities for our listed companies. Malaysia’s transformation towards a high-income nation has created fertile ground for our listed companies to transform into regional and global multinationals. This year, Bursa Malaysia has successfully listed two of the world’s five largest initial public offerings to be a leading capital raising venue for the ASEAN region and remains the world’s sukuk leader with 70% of global deals done. The connectivity of the ASEAN Exchanges through the ASEAN Trading Link is also significant in creating greater networking between market participants, providing international investors access to more opportunities. The creation of a new asset class via the ASEAN Exchanges collaboration will boost retail participation in the domestic marketplace and generate new listings of products and companies on Bursa Malaysia that will attract more investors.

What investments are needed to increase technology-driven innovation in local capital markets?

TAJUDDIN: Bursa Malaysia regularly reviews the trading capabilities and effectiveness of its system. We are focused on building an IT infrastructure that is robust, scalable and provides easy access as well as efficient clearing and settlement systems that support current expectations and future growth. The introduction of a new clearing system in early 2012 to provide faster and more efficient services for its derivatives has also paved the way for the introduction of new derivatives futures and options products. To further improve IT governance, an information security management system was implemented in 2011 for securities trading. We also instituted a direct market access infrastructure for higher-speed market date and trade execution. A new surveillance system currently being developed will result in a dynamic surveillance solution that will enhance the real-time monitoring of the marketplace. The exchange is also expected to put in place a new trading system in the next couple of years.

What factors determined the timeline for introducing new futures and options products following the trade-clearing facility’s launch?

TAJUDDIN: In line with our goal of becoming the leading marketplace in Asia, Bursa Malaysia is constantly looking at introducing more tradable products on the exchange. In this regard, we introduced options on crude palm oil in mid-July 2012 to complement our highly successful crude palm oil futures (FCPO) contract. We believe the launch was timely as the increasing liquidity in the underlying FCPO contract indicates a greater level of participation in the futures market.

How do you see the initial growth of the global murabahatrading platform given the expansion of Islamic financial products in overseas markets?

TAJUDDIN: Commodity murabaha is increasingly becoming internationally recognised as a key Islamic financial contract. We are thus committed to further developing the Bursa Suq Al Sila (BSAS) trading platform by expanding its commodity supply base and increasing transparency. BSAS has enjoyed strong growth in trading volume and value, as well as in attracting greater foreign and domestic investor participation. In early 2012, we expanded commodity offerings to include refined, bleached and deodorised palm olein. We hope to see a wider global acceptance of the BSAS platform, as the next phase of growth for Islamic capital markets will likely be characterised by greater internationalisation. This could include more investors seeking products with international exposure and a diversity of currencies used for Islamic financial instruments. Malaysia is in a good position to take advantage of the increasing global demand for sharia-compliant instruments.