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The Malaysia Stock Exchange is exploring measures to reduce the dominance of institutional investors in the local stock market. This initiative aims to diversify share ownership and increase market participation from retail investors, a move that could bring more balance and stability to the financial landscape.
Currently, institutional investors—such as pension funds, asset management companies, and sovereign wealth funds—hold a significant portion of shares listed on Bursa Malaysia. Their outsized influence has been a topic of concern, with critics arguing that it contributes to market volatility and diminishes the role of retail investors. To address this, Bursa Malaysia is considering a range of strategies designed to encourage broader participation from individual investors and smaller market players.
Among the proposed measures are revisions to listing rules and regulatory frameworks to make it easier for retail investors to access the market. The exchange is also looking into introducing new financial products that cater specifically to retail investors, offering lower entry barriers and greater opportunities for portfolio diversification.
Bursa Malaysia is also considering incentives for smaller institutional investors and new market entrants. These measures are intended to create a more competitive landscape and reduce the risk of market manipulation or dominance by a few large players.
Market analysts have welcomed the initiative, noting that a more balanced distribution of stock ownership could lead to greater market stability. “Reducing the influence of large institutional investors could help mitigate the risk of sudden market swings and promote healthier trading dynamics,” said Tan Sri Dr. Mohd Irwan Serigar Abdullah, a senior economist at the Institute of Strategic and International Studies Malaysia.