The removal of Malaysia from the market accessibility of FTSE Russell’s Watch List is in recognition of the various tangible initiatives it has implemented over the past two years under the leadership of Bank Negara Malaysia (BNM), said the Financial Markets Association of Malaysia (FMAM).

The association said the comprehensive multi-pronged initiatives included five global investors’ engagement sessions (roadshow to Tokyo in August 2019 and four global webinars) by BNM and the Ministry of Finance (MoF), and streamlining of compliance, regulatory, and operational requirements for both local and foreign participants.

“The other initiatives are the consolidation of government bond issuances, enhancement to repo market and dynamic hedging framework, option for physical delivery of Malaysian Government Securities (MGS) futures, and the liberalisation of interest rate swap (IRS).

“All these have contributed to a more resilient, vibrant and efficient Malaysian government bond market,” it said in a statement today.

According to the FMAM, the global reach of primary market maker and approved overseas offices as an extension of the Kuala Lumpur onshore market had yielded positive and welcoming feedback from non-resident stakeholders of multinational corporations and global investors, as both provided liquid and timely market access to the ringgit foreign exchange and fixed income instruments around the clock.

“FMAM will continue to coordinate across the different financial institutions for the common goal of developing Malaysia as a preferred investment destination.”

While congratulating Malaysia on the FTSE Russell’s decision to remove Malaysia from the watch list and retain the country’s membership in the FTSE World Government Bond Index (WGBI), the association said the concurrent announcement of the inclusion of China and reviews for inclusions of other markets are a reminder that there is no room for complacency and that Malaysia needs to continue to be incremental and progressive.

“FMAM will be diligent in our efforts to grow the Malaysian financial markets, while we compete intensely with each other, we are united in our common goal to grow the size and significance of the Malaysian financial markets.

“This fine balance has yielded positive results so far, and we will intensify our efforts from here,” said FMAM president Chu Kok Wei.

In the FTSE Fixed Income Country Classification Announcement for March 2021 released on Monday, FTSE Russell announced that Malaysia will be removed from the FTSE Russell Watch List for potential reclassification of its market accessibility level from “2” to “1” and will retain its membership in the FTSE WGBI.

FTSE Russell commended BNM on its previously implemented and ongoing initiatives to address the concerns of foreign investors when accessing the Malaysian government bond market.