In August 2020, Capital Markets Malaysia(CMM) announced the launch of itsELEVATE Programme: a 12- month capitalraising and business professionalizationprogramme designed for companieswithin the mid-tier segment of theMalaysian economy.

With the first cohort about to commence,we explain how Elevate will deliver valueto mid-tier companies, and whycompanies are excited about theprogramme.

A good place to start is to understand whyElevate is targeted at the mid-tiersegment of the Malaysian economy.Zalina Shamsudin, General Manager ofCMM explains, “The mid- tier segmentrefers to companies with an annualrevenue size of above RM 20 million.These companies represent a sector ofthe economy that are already successfulin the domestic market and have thepotential to become market leaderseither regionally or internationally. Ouraim is to help facilitate their growth bypreparing them to fundraise throughthecapital market.”

The Elevate Programme: Ready to Roll

In designing the programme, CMMengaged with various stakeholders tounderstand what is needed to beaddressed. “The private markets havebeen steadfastly growing in Malaysia butwe have had a lot of feedback fromstakeholders on how it could be better”,Zalina says. “One challenge is thatcompanies seeking investment areunable to properly articulate their visionand growth story, and to engageeffectively with investors”

“Companies seeking to raise funding onthe other hand have told us that there isinsufficient risk capital onshore which iswhy these growth stage companies lookfor funding offshore.”

Therefore, the ELEVATE programme wasdeveloped with the aim of supporting thegrowth of mid-tier companies that havethe potential to grow their businesses tothe next level, and may be impeded bylack of the appropriate type of funding.The programme’s main objective istoprepare these selected companies tobecome investment-ready for funding

through the capital market, be it throughventure capital, private equity or IPOs.

In identifying which type of companieswould benefit from the programme Zalinaexplains, “We identified that thecompanies needing to upscale theirbusinesses were largely at one of threestages: Family-run businesses in theirsecond and third generation, looking to re-engineer their business models, revitalisetheir growth strategy and innovate mind-sets, established entrepreneurs looking fornew growth strategies and trying tounderstand how to value their businessesand evaluating fundraising options, andfinally businesses that have facedchallenges in securing risk capital that arenow seeking guidance on how to pitch theirbusiness ideas to new investors.”

Has the programme attracted its intendedaudience? We speak to two founders tofind why they’ve joined and what theirexpectations are.

OCTOBER 2020 CAPITAL MARKETS MALAYSIA NEWSLETTER

The Bulletin

Ipay88, a payment gateway providerestablished in 2006 is now a householdname in Malaysia. Its co-founder, ChanKok Long, tells us that having establisheditself as a leader in its field, it is nowseeking to aggressively expand regionally.“Our challenges in growing regionallycome down to two areas: market accessand funding. We are very excited aboutthe Elevate Programme and hope that itwill give us access to the experiences ofsuccessful companies. We want to bementored by these companies.”

Chan goes on to say that besides trainingfounders like himself, the ElevateProgramme will also benefit hismanagement team.

“Our team has to evolve. We canno longer be the jaguhkampong. We need to learnfrom companies who havemade it big overseas. We arealready in high growth mode –we must know how to scale up.”- Chan Kok Long, Co-Founder andExecutive Director, ipay88

Chan says another element of theprogramme that interested him wasunderstanding how to get good access tofunding. On this note, Zalina explains, “wehave incorporated pitch bootcamps in theprogramme as we are aware that thereare many companies that struggle withhow to pitch their businesses, or evenwho within the management team shouldbe doing the pitching. The mentoring partof the programme will include one on onesessions on how to pitch, and there willalso be an opportunity to pitch to VCs andPEs at the end of the programme.”

Sinan Ismail, founder of Digital Durian,runs a highly successful animationcompany, whose content is among thechoice content for parents, being used inschools and learning centres, and alsobeing used to connect with special needschildren. After 12 years, the challenge, hesays, is how to take the company to thenext level.

“We have a brand now that isready to go global. Theknowledge we have now isn’tenough for where we want to go.Our dreams are big and thevision for Digital Durian is tobecome a world class animationcompany by 2025.”– Sinan Ismail, CEO, Digital Durian

The challenges, according to Sinan, are inunderstanding the landscape and newbusiness models needed when expandingto other markets. “When I heard about theElevate Programme, I thought, this isexactly what we’re looking for. Theinteresting thing is that it’s not a one-offseminar but a structured one-yearprogramme. Learning from the challengesof the mentors and getting advice fromthem – that’s an element that’s huge forus. It could not have come at a bettertime. We’re at the juncture of wanting toexpand but not knowing exactly now.”

The Elevate Programme for Mid Tiercompanies will commence its first cohorton 5 November 2020. The programme isheavily subsidized by Capital MarketsMalaysia, with companies having tocontribute RM 6,300 which is HRDFclaimable. For information on how to joinvisit: www.capitalmarketsmalaysia.com/elevate-programme

Building Malaysia’s Responsible Marketplace

• Securities Commission introducing a comprehensiveSustainable and Responsible Investment (SRI) Roadmap,

• Capital Market Malaysia’s (CMM’s) launching of theSustainability Centre of Excellence,

• Capital Market Development Fund’s (CMDF’s) funding ofThe Sustainability Accelerator,

• Bank Negara introducing global guiding principles andmeasurements in Islamic Finance with Value BasedIntermediation (VBI),

• Bank Negara launching the Joint Committee on ClimateChange,

• Nine signatories to the United Nations Principles forResponsible Investment (UNPRI) including our largestinstitutional investors KWAP, EPF and Khazanah,

• A variety of responsible financing products including theworld’s first Sustainable Development Goals (SDG) sukukby HSBC Amanah and Sustainability Linked Financing (SLF)products by CIMB and OCBC, and

• The recent enforcement of new provisions by the MalaysianAnti-Corruption Commission (MACC) under Section 17A forincreased corporate accountability.

To achieve the goal of being a leading ResponsibleMarketplace, all players will need to band togethercollaboratively, from high-level policy setting to tactical businessprocess reengineering.

The potential of capital markets to affect the change that ourworld desperately needs to see has much been studied andtouted. As the key wealth generation engine, capital marketscan shape national capitalist values and guide the playerstowards collective goals.

In Malaysia, we are primed to build our capital market towardsgreater responsibility – responsible management of our naturalresources industry and growth of our Islamic finance leadershipare two among many leading areas of possible focus.

Increased efforts will grow our investible pool of companies aswe attract and ringfence more and more SRI funds in thecountry. Creating an enabling environment for our Malaysiancompanies to adopt Sustainability and ESG more strategicallywithin their business will create business benefits and uplift thecapital market towards a track record of integrity and ethicalgrowth.

The various players in the Malaysian capital market have startedthe critical conversation of Sustainability and ESG withmilestone steps that are strategically building a ResponsibleMarketplace.

Among others, these include:

• Bursa Malaysia as the first stock exchange in South EastAsia to introduce mandatory Sustainability reporting,

• FTSE4Good Bursa Malaysia (F4GBM) as the first in Asia tobe part of the FTSE4Good benchmark,

Global and localInvestors

Creating strongDemand for ESGInvestments

MalaysianMarketplace

Providing Accessand Visibility to

Leading ESG Players

Regulators Providing Motivating Boundaries and Guidance inSteering Malaysia Towards Being a Responsible Marketplace

Enabling Factors Driving Global and Local Market Players TowardsParticipating in our Responsible Marketplace

MalaysianCompanies

Practicing, Managingand Reporting onTheir ESG Impact

By Margie Ong, CEO of Thoughts In Gear

Malaysia - Your Responsible Marketplace

It is a worthy goal for the prosperity of our capital market and for the scalablesocial and environmental impact that only this engine can create.

Brought to you by:

Things YourCompany Needsto Know inBuildinga ResponsibleMarketplace5

You are working to lead your company through this pandemic,either dealing with critical struggles or coping with unexpectedgrowth. Prior to this, you have been adopting Sustainabilitymainly to fulfil the local regulatory requirements, but now you’rehearing of more and more traction with this agenda.

As the producers of products and services, companies are a keycomponent of a Responsible Marketplace and your decisionshave great impact on the world we live in.

Here we’ve compiled the key things you need to know aboutSustainability in Malaysia currently to help guide decisionmaking in your company.

1 The concept of Sustainability isgoing from strength to strengthGET

ONBOARD• Global sustainable fund assets stood at USD 841 billion as

of the end of March, with Asia ex-Japan up 21% in Q1 2020bucking overall trend1

• 93% of the 250 largest companies in the world report onSustainability2

2 It will increasingly be a license tooperate in the marketplaceBE AWARE OF YOURRISK EXPOSURE

• Bank Negara has stated that 11.7% of Malaysian financialinstitutions’ assets are potentially exposed to climaterisks3

• Increased scrutiny of global supply chains has seencountry-wide bans of Malaysian companies in the rubberand palm oil sectors4

3 You can leverage Sustainability tocreate value in your companyREALISE SHORT TERM ANDLONG TERM BENEFITS

• Embracing the UN SDGs is a US$30 trillion opportunity forbusiness by 20255

• Reduce risks, increase profits and unlock growth viaefficiencies, innovation, new markets, access to funds,choice of talent, customer loyalty and increased trust6

5 You can be supported through your adoption of Sustainability

Contact us at mira@bursamalaysia.com before seats run out!

JOIN US FOR THIS FREE PROGRAMMEThe Sustainability Accelerator is a fullyfunded programme to help 100 publiclisted companies understand,strategise, measure and report onSustainability. This engaging programmewill walk through step-by-step processesaligned to global standards.

Source: 1Morningstar, 2020; 2KPMG, 2017; 3Climate WeekNYC, 2020; 4National Media, 2020; 5McKinsey, 2012; 6LondonBusiness School, 2020; 7Harvard Business Review, 2019

You will get 4 actionable workshopsand access to the SustainabilityCustomer Support Centre toaddress your Sustainability issues.

You will also receive theSustainadata™ Toolkit, a setof detailed tools andtemplates to guide yourSustainability journey fromensuring compliance togenerating business benefits.

4 You can effect tremendous socialand environmental impactBELIEVE IN YOUR PURPOSE

AND YOUR POTENTIAL• There is no denying the scale of resources that the private

sector can mobilise through yourcore business activities for social and environmentalimpact to save humanity from suffering and devastation7

The CFO Roundtable:CFOs as Sustainability Stewards

As CFOs, the group’s emphasis is naturally on profitability –there was a resounding agreement that being sustainable doescost money and therefore requires demand, be it fromcustomers or investors. And as one CFO questioned – arecustomers really willing to pay for added value?

The exception to this is of course when sustainability initiativesare led top-down. Roundtable participants acknowledged thatwhere the company’s board and senior management haveembraced the concepts of sustainability, integration into thecompany’s operations and strategy becomes a clear mandate.The importance of top level buy-in is seen as crucial. One CFOsaid that in the short to mid-term, having a sustainability agendathat is separate from the company’s business strategy wouldnever work. An alignment of both is key, and must be driven fromthe top down.

CFOs were also vocal about the fact that in meetings withinvestors, it is rare for them to ask questions about thecompany’s sustainability. There seems to be little interest fromshareholders on matters of sustainability, and there is clearly aneed for more awareness in order for this to change.

Corporate Malaysia has a long journey ahead. What isencouraging, however, is the agreement around the table that inthe long run being a sustainable corporation makes for goodbusiness.

A full report on the Roundtable will be made available on theCapital Markets Malaysia website in December 2020.

On 28 September 2020, Capital Markets Malaysia and GlobalCompact Network Malaysia hosted a roundtable featuring ChiefFinancial Officers from a select group of public listed companiesto understand the challenges faced and strides made inincorporating sustainability principles in corporate Malaysia.

Discussions were frank, candid and overall very encouraging.However, it is clear that collectively within the group, there arechallenges in truly integrating sustainability into a company’soperations and strategy.

CFOs as Sustainability StewardsAt least half of the CFOs around the table affirmed that theirsustainability journey is still anchored in compliance andmeeting disclosure requirements. There is no real drive towardstaking corporate sustainability to the next level. The reasons forthis are varied – in some cases it is merely a matter ofprioritizing the company’s survival during this difficult time overother endeavors.

In other cases, the CFOs are clear that efforts in truly integratingsustainability in every business segment of the organizationmust be based on customer demand. For example, a propertydeveloper at the table indicated that there was no choice but toinfuse elements of sustainability in the design of new buildingsas this was demanded by their tenants which are predominantlymultinational corporations. This makes the decision to besustainable an easy one. On the other hand, a luxury cardistributor argued that their clients are not asking for‘sustainable vehicles’ and therefore including such features intheir products was not a priority.