This article first appeared in The Edge Financial Daily on May 31, 2018

KUALA LUMPUR: Kenanga Investment Bank Bhd (Kenanga IB), which is in talks to buy Inter-Pacific Securities Sdn Bhd, has teamed up with Taiwan’s largest securities firm Yuanta Securities Investment Trust Co Ltd to develop new types of exchange-traded fund (ETF) products including futures-based and conventional commodity-based ETFs.

In a statement yesterday, Kenanga IB said the strategic collaboration, through its asset management arm Kenanga Investors Bhd, with Yuanta is a move in support of the call to develop a more vibrant ETF market.

“This will provide affordable entry points for retailers in traditionally difficult-to-access investments. The collaboration is expected to see new innovative strategies including the introduction of leveraged and inverse ETFs in the near future,” it added.

Kenanga IB group managing director Datuk Chay Wai Leong said Yuanta has immense retail experience and ETF expertise having launched Taiwan’s first ETF 15 years ago.

“Over the last decade, they have played an instrumental role in the launch of ETFs regionally, including Thailand, Korea, Hong Kong and China. We hope that this will boost the exchange of ideas and existing business interactions between both companies and also the respective country’s stock exchange development. I am sure we will be able to create a synergy and sparkle off innovative ideas,” he said.

An ETF task force chaired by the Securities Commission Malaysia and comprising Bursa Malaysia Bhd, fund managers, market makers and institutional investors was set up in 2016 and in mid-2017 recommended measures to spur sustained development and competitiveness of the Malaysian ETF market.

Bursa chief executive officer Datuk Seri Tajuddin Atan said the regulator will continue to work closely with the industry to spur sustained development and increase competitiveness of the local ETF market through education and implementation of relevant recommendations by the ETF Taskforce.

“Bursa remains committed to provide a conducive environment and facilitate the creation of investment opportunities that are attractive and diverse to cater for the changing needs of retail and institutional investors,” he added.