Rebuilding Market Trust In An Era of Uncertainty

Bismillahirrahmanirrahim

Yang Berbahagia, Datuk Wira Is Ismitz Matthew De Alwis
Vice President of Institutional Investors Council Malaysia (IICM)

Yang Berbahagia Dato’ Mohammad Faiz Azmi,
Chairman, Securities Commission Malaysia

Distinguished guests

Ladies and gentlemen

Assalamualaikum Warahmatullahi Wabarakatuh

And Salam Malaysia MADANI

1. I thank IICM and the Securities Commission Malaysia for convening this important conference. Coming after this morning’s discussions on investor confidence and stewardship, this is a useful moment to step back and ask why governance is no longer a narrow corporate issue, but a national competitiveness issue.
   
   
2. Let me begin with something familiar. We tend to think of the brakes on a car as the thing that slows us down and holds us back. Any racing engineer will tell you it is closer to the opposite. Brakes are what allow a car to go fast in the first place. A driver carries speed into a corner because he trusts the car will stop when he needs it to.
   
   
3. The fastest cars ever built, including the ones that once raced around our own circuit at Sepang, carry the most powerful brakes of all. They go fast precisely because they can stop quickly. The confidence to move quickly comes from knowing that you can stop safely.
   
   
4. That is a useful way to think about this year’s theme, rebuilding market trust in an era of uncertainty. Good brakes are what allow a car to go fast, and good governance is what allows a market to go further.
   
   
5. We may not see governance in a rising index, a successful listing or a large fundraising. Yet very little in that picture moves without it.
   
   
6. When people trust the brakes, capital travels at speed. When that trust is lost, every participant lifts off at once, and the whole market slows.
   
   
7. This matters because we are all driving in genuinely difficult conditions. Geopolitical fault lines are shifting and supply chains are being redrawn. Technology is rewriting industries faster than our institutions can follow, and capital has grown more impatient and more mobile than at almost any time we can remember.
   
   
8. In this environment, it can be tempting to treat governance as something that slows us down, or as a luxury for calmer roads.
   
   
9. The reverse is true. The more difficult the road, the more investors look for evidence that the market can still be trusted. They look at the quality of disclosure, the independence of judgement around the board table, the discipline of capital allocation, the credibility of transition plans and the conduct of controlling shareholders.
   
   
10. They reward companies that can answer those questions early, because confidence is earned through the quiet disciplines of governance.
    
    
11. For Malaysia, this is before anything else a matter of national competitiveness. We are a trading nation with deep pools of long-term savings.
    
    
12. Our ability to finance growth and attract quality investment depends on whether the world believes capital can enter here with confidence and stay through the cycles.

Ladies and gentlemen,

13. That confidence begins with discipline at home. Markets trust reform more when the public institutions around them are also governed with discipline. Since 2023, Malaysia has strengthened this discipline through law.
    
    
14. The Public Finance and Fiscal Responsibility Act now commits us to a deficit trajectory of 3% of GDP and a ceiling on public debt. The Government Procurement Act, our first comprehensive law of its kind, moves public spending into transparent and competitive channels. The Public Service Efficiency Commitment Act holds the civil service to standards it can be measured against.
    
    
15. None of this makes for thrilling reading, and that is rather the point. The work of reform is seldom glamorous, but it is what gives the rest of the system the confidence to move.
    
    
16. The numbers have begun to answer back. Our fiscal deficit has narrowed from 6.4% of GDP in 2021 to 3.7% in 2025, with a credible path towards 3.0%.
    
    
17. Malaysia has also risen to 15th out of 70 economies in the 2026 IMD World Competitiveness Ranking, up from 23rd in 2025 and 34th in 2024. This is Malaysia’s strongest performance in a decade, and a sign that reform is beginning to show up in external benchmarks.
    
    
18. For a global investor weighing a commitment in years, these are the signs that the country can be trusted to stop itself before trouble. That is what turns confidence into long-term commitment.

Ladies and gentlemen,

19. If government provides the first set of brakes, the institutions in this room provide the second, through the steady discipline ofstewardship.
    
    
20. Many of you manage the retirement of workers, the contributions of depositors, the trust of pilgrims and the savings of ordinary Malaysians. The capital you steward belongs to people you will mostly never meet, but whose future depends on the discipline with which that capital is managed.
    
    
21. That is why stewardship must go beyond quiet ownership. It means pressing for wise capital allocation, careful management of related-party dealings, executive rewards that support durable value, and fair treatment for the smallest shareholder as well as the largest.
    
    
22. These questions matter because a balance sheet only tells us what a company owns. Governance tells us whether the company’s word can be trusted. In the long run, that is what the market prices.
    
    
23. This is the context for GEAR-uP. Through the programme, our six government-linked investment companies have committed to mobilise an additional RM120 billion of domestic direct investment over five years. In 2025, they deployed around RM20 billion into more than sixty Malaysian companies.
    
    
24. As stewards of more than 30 GLCs, the GLICs are also helping drive these companies towards achieving 7.5% annual shareholder returns over the five-year horizon, translating into an additional RM100 billion in market capitalisation. The point is that national capital should not only mobilise investment but also help raise the standard of corporate Malaysia.
    
    
25. That same logic sits behind our own Value Up programme, a joint effort by the Securities Commission and Bursa Malaysia. The earlier session asked what Malaysia can learn from Japan and Korea. My answer is that we can learn a great deal, and we should, while shaping a version that fits our own market and is driven by the institutions in this room.
    
    
26. That work has already begun. The first cohort covers our top 88 listed companies, with clear expectations on disclosure, capital allocation and engagement with the shareholders many of you represent.

Ladies and gentlemen,

27. From stewardship, the next responsibility sits in the boardroom, where governance stops being a document and becomes a habit of mind.
    
    
28. Capital and policy can set the conditions, but the most consequential decisions about a company’s integrity are taken around the board table, often under pressure and away from public view.
    
    
29. A board earns its keep when directors are willing to think independently, not simply qualify as independent. The best directors test optimistic assumptions, weigh risks honestly and push management to think beyond the next reporting cycle.
    
    
30. That now requires a wider range of judgement than before, across economics and geopolitics, technology and climate, supply chains and global markets.
    
    
31. Board renewal is therefore a matter of resilience rather than housekeeping. Malaysia needs the wisdom of experienced directors and the readiness of new ones.
    
    
32. The same maturity is needed in sustainability. Investors want to know whether a transition plan is genuinely financed and able to earn a return, not whether it reads well on paper.
    
    
33. A board that treats governance as a box to be ticked has brakes that look good on paper but fail when they are needed. A board that treats governance as a discipline builds a company that can be trusted at speed and in a crisis.

Ladies and gentlemen,

34. None of us maintain this system alone. Government provides fiscal and institutional credibility, and regulators set the standards and inspect the work.
    
    
35. Boards set the discipline, institutional investors supply the capital and conviction, and companies repay that trust through stronger performance and better conduct.
    
    
36. The Securities Commission and Bursa Malaysia have a particular responsibility here. Clear rules, firm enforcement and steady consistency are what turn confidence into something the market can rely on.
    
    
37. Confidence holds only when every part of the system does its job. Government, regulators, boards, investors and companies each have a role the others cannot perform.
    
    
38. At its heart, governance is about the people whose savings, jobs and futures depend on the system working properly. When a company is well governed, the pension savings entrusted to it are better protected. When boards make decisions with discipline, companies become stronger places for people to work, invest and build the nation’s future.
    
    
39. For the teacher paying into her retirement fund, for the young Malaysian buying his first unit trust and for the entrepreneur seeking capital to grow, governance matters because it shapes real outcomes. It protects savings, prices risk more honestly and helps good companies raise the capital they need to grow.
    
    
40. So let me return to where I began. No one drives fast in a car they cannot stop, and no one commits capital to a market they cannot trust.
    
    
41. That is why the ambition in our Capital Market Masterplan is also a governance test. The plan sets out to grow Malaysia's capital market from RM4.3 trillion at end-2025 to as much as RM6.3 trillion by 2030, implying annual growth of 6% to 8%, faster than nominal GDP growth.
    
    
42. Growth on that scale will only be credible if governance strengthens with it. Investors will look for reliable disclosure, consistent enforcement, stronger boards and owners prepared to steward capital seriously.
    
    
43. So let us stop thinking of governance as the thing that holds us back. Let us treat it instead as what it has always been, the reason we can go fast at all. A market built to move safely is a market that can move further.
    
    
44. I wish you a productive remainder of the conference. May today’s discussions help build a Malaysian capital market that moves with confidence because it is governed with discipline.

Wabillahi Taufik Wal Hidayah, Wassalamualaikum Warahmatullahi Wabarakatuh.

Thank you.