Capitalising on good career prospects

The Annual Report 2010 of the Securities Commission of Malaysia (SC), which was published in March 2011, indicated that Malaysia's capital market has reached RM2 trillion at the end of last year, with RM1074.1 billion coming from the Islamic capital market and RM1186.7 billion from the conventional capital market.

It has been forecasted that this current capital market size is expected to double to become RM4.5 trillion by the year 2020, as was stated by Prime Minister, Datuk Seri Najib Tun Razak on 12 April at the launch of Capital Market Masterplan Two (CMP2), a plan aimed at further developing the Malaysian capital market over a period of ten years.

Besides the CMP2, the government has put into place various other initiatives which aim to revitalise the Malaysian capital market this year.

Under Budget 2011, changes were made in government-linked investment companies whereby shareholdings in major companies listed on Bursa Malaysia were to be divested and overseas investments increased; higher public shareholding allocated for Petronas Chemicals Sdn Bhd and Malaysia Marine & Heavy Engineering Sdn Bhd, subsidiaries of Petronas and MISC Bhd; sukuk and conventional funds to be launched to meet retail investors' demands; three new stock broking licenses given to eligible local, foreign or joint venture companies and the number of Proprietary Day Traders operating in the market will be increased by the SC.

Besides this, considerable emphasis is being placed on the development of the Islamic capital market due to the encouraging potential that has been exhibited by this segment of the market. In the fiscal year 2010, the Islamic capital market in Malaysia had exceeded RM1 trillion, recording an impressive growth rate of 15.2%.

Bursa Malaysia will be working towards creating an international board to list foreign securities, and the inclusion of syariah compliant products on this board has been planned.

It was also proposed that expenses incurred in relation to Islamic securities would be made tax deductible in order to increase the competitiveness of the Sukuk market.

Under the Economic Transformation Programme (ETP) and the 10th Malaysia Plan, the government has put in place various projects aimed at boosting the attractiveness of the local equity capital market in the eyes of both local and foreign investors. The projects concerned are targeted at the construction, and oil and gas sectors of the economy.

Technological advances have also been made to improve the efficiency of the local capital market lately.

For instance, in August 2010, an electronic share payment facility for share related transactions was created through the collaboration of the SC, Bank Negara Malaysia (BNM) and Bursa Malaysia.

An e-Dividend service is also now available, enabling cash dividends to be paid to investors directly via their bank accounts, as opposed to payments via cheque which were used previously.

Other Southeast Asian countries including Malaysia have begun to work at collectively attracting more investments into the region. The Star reported on 9 April that the ASEAN (Association of Southeast Asian Nations) Exchange Linkage has been set up with the aim of increasing accessibility to Southeast Asian markets.

Besides Bursa Malaysia, the Hanoi Stock Exchange, HoChiMinh Stock Exchange, Indonesia Stock Exchange, Philippines Stock Exchange and the Stock Exchange of Thailand are also participating in this initiative.

An ASEAN Exchanges website (www.aseanexchanges.org) has been launched for this purpose, with 30 leading stocks from each of the participating exchanges to be featured as ASEAN Stars.

All these factors are indeed encouraging for all who are seeking to find work in this sector.

Jobs in the capital market can be broadly categorised under two main divisions: the equity capital market and the debt capital market. The former involves the trading shares of various companies (more commonly known as the stock market) whereas the latter concerns the trading of bonds. The debt (bond) market is typically larger than the equity (shares) market.

Although some people choose to specialise in either the equity or debt market, it would be better to have adequate knowledge in both, since some financial institutions have resorted to having only one department which is designated to handle both these areas.

In order to build a stellar career in the capital market, you will need to be able to work well with numbers, possess good communication skills in both writing and speech, have a good grasp of business concepts and be significantly details oriented.

A background in finance and accounting is also useful, especially if you have knowledge in financial modelling, taxation, and accounting valuation and analysis. Having an in-depth understanding of both equity and debt capital markets will also give you a better competitive edge over others within the industry.

For fresh graduates who are interested in delving into a career in capital markets, programmes such as the Graduate Development Programme which is run by the Securities Industry Development Corporation (SIDC) may help them start off on the right footing. This programme provides training and job attachments for 180 graduates over a period of two years. Five intakes have been scheduled, with the last one set to take place in July 2011.