LOCAL CAPITAL MARKET EXPANDS SIGNIFICANTLY

KUALA LUMPUR: Malaysia’s capital market has significantly expanded in the first seven months of the year, with gross funds raised growing 21.4 per cent to RM134.6 billion, according to the 2017/2018 Economic Report.

There was also a balanced contribution to the overall gross fund raised in the capital market for the private and public sectors amounting to RM67.2 billion and RM67.4 billion, respectively.

Gross funds by the public sector rebounded 16.9 per cent, reflecting the government’s ongoing initiatives to develop the Malaysian economy through the implementation of the Eleventh Malaysia Plan.

During the same period, the issuances of the Malaysian Government Securities grew 14.3 per cent to RM35.5 billion, while total net funds raised by the public sector rebounded 27.5 per cent to RM42.5 billion.

Gross funds raised by the public sector, meanwhile, were higher at 26.3 per cent compared with 20.8 per cent in the same period the year previously. The bulk of the new issuances were mediumterm notes, which accounted for 94.4 per cent of total corporate bonds.

“This increase was driven by improved sentiments regarding Malaysia’s favourable economic performance and higher investors’ confidence,” said the report.

Finance, insurance, real estate and business services sectors continued to account for the bulk of funds raised at RM35.4 billion, which is the lion’s share of corporate issuance at 62.1 per cent.

“Despite external headwinds, funds raised in the domestic equity market also increased significantly with 10 initial public offerings worth RM7.4 billion up to July, in tandem with improving domestic economy,” it added.

In the corporate bond market, yields of the higher rated notes also continued to benefit from domestic institutional investor demand. “Investor confidence was also boosted by strengthening ringgit and strong economic growth owing to healthy domestic demand and firm exports,” said the report.