M’sian capital market surges 12.6 per cent to RM3.2 trn
KUALA LUMPUR: The Malaysian capital market surged 12.6 per cent to RM3.2 trillion in 2017 with strong growth seen across all segments, said the Securities Commission Malaysia (SC).
It said the capital market saw double-digit growth across segments with the equity market rising 14.4 per cent to RM1.9 trillion, bond and sukuk was 10.1 per cent higher at RM1.3 trillion and the Islamic capital market increasing 11.9 per cent to RM1.9 trillion, close to 60 per cent of overall capital market.
The growth was at 2.4 times gross domestic products and it was the fifth largest in Asia, the SC said in its 2017 annual report released yesterday.
The capital market has recorded a strong growth in all segments and continues to play a major role in capital formation and the financing of the Malaysian economy, while at the same time offering a wide range of opportunities for investors as reflected by high level of participation.
Chairman Tan Sri Ranjit Ajit Singh, in his annual report briefing, said the growth in all segments was due to strong economic fundamentals, continuation of earnings recovery, capital raising for infrastructure financing, positive foreign inflows with net inflow of RM17.6 billion, and higher level of investors participation. “The capital market has recorded a strong growth in all segments and continues to play a major role in capital formation and the financing of the Malaysian economy, while at the same time offering a wide range of opportunities for investors as reflected by high level of participation. “We will continue to ensure a facilitative ecosystem and regulatory architecture to promote the trust and confidence in the market,” he said.
Ranjit said the fundraising was also exceptionally strong last year, at a record high of RM146.6 billion, which were above the five-year average of RM114 billion.
This underscores the capital market depth and continuous ability to provide a facilitative and effective avenue for capital raising, he said.
Corporate bonds and sukuk issuances of RM124.9 billion in 2017 also exceeded the RM100 billion mark for the first time since 2012, while fundraising via equity market rose to RM21.7 billion last year versus RM12.8 billion in 2016 .
He said for the equity market, RM7.2 billion were raised via 12 initial public offerings and another RM14.5 billion were raised in the secondary equity market for business expansion and balance sheet strengthening.
Ranjit said the market also saw strong growth in fund management industry which grew 11.5 per cent with asset under management of RM776.2 billion versus RM696.3 billion in 2016.
The growth was driven by an expansion in the unit trust industry, which jumped 19.1 per cent to RM427 billion in net asset value (NAV) and saw its net sales increased to RM45.2 billion in 2017 from RM26 billion in the previous year.
He also noted that there was also increasing interest towards private retirement scheme with its membership rising to 301,000 with NAV at RM2.2 billion.
Moving forward, the continuation of global economic expansion would give positive influence on capital market, particularly for the emerging markets which saw sustained interest , he said.
“The Malaysian capital market is expected to remain robust and competitive on the back of sound economic fundamentals and higher earnings forecast,” said Ranjit.
He expected fundraising to reach RM120 billion in domestic market this year, with corporate bonds and sukuk accounting for about RM100 billion of total fundraising, while the balance via equity capital market.
The SC also expects the initial public offerings this year to raise about RM8 billion, up from RM7.2 billion in 2017 with about RM12 billion to be raised via secondary market, he said.
Ranjit said although the estimated fundraising was lower compared to RM146.6 billion raised last year, the market was still considered robust as it was still above the average of RM114 billion. — Bernama
Tan Sri Ranjit Ajit Singh, SC Chairman