Private sector boosts capital market funds

GROSS funds raised in the capital market during the first seven months of this year increased 3.9 per cent to RM110.9 billion due to higher fund-raising activity in the private sector.

According to the Economic Report 2016/2017, the increase was reflected through higher new issuances of medium-term notes, which rose 39.3 per cent to RM40.7 billion.

The bulk of the funds were raised by the finance, insurance, real estate and business services sectors, accounting for 50.3 per cent of new corporate bond issuances.

The funds were mainly used for infrastructure projects, working capital and general business activities.

Gross funds raised by the public sector declined eight per cent to RM57.7 billion from January until July due to lower borrowings by the government.

Funds raised through the issuances of Malaysian Government Securities grew 10 per cent to RM30.9 billion.

The issuances of Malaysian Government Investment Issues decreased slightly by 1.3 per cent to RM26.8 billion.

Meanwhile, the report stated that the local equity market remained subdued in the first seven months of the year.

“From the beginning of the year until end-July, the FTSE Bursa Malaysia KLCI (FBM KLCI) declined 39.25 points, or 2.3 per cent, to close at 1,653.26 points.” The Islamic capital market continues to grow with 669 syariah-compliant securities listed on Bursa Malaysia as at end-July. Pic by Asyraf Hamzah

The market started the year on a weaker note amid signs of a global economic slowdown on the back of renewed concerns over the prolonged lower global crude oil and commodity prices.

The derivatives market recorded 6.5 per cent growth in trading to 8.3 million contracts during the first seven months.

Turnover was dominated by crude palm oil futures, amounting to 79.5 per cent of the total trading, followed by FBM KLCI futures with 20.1 per cent, while other derivative instruments added only a small contribution to trading.

The unit trust industry continued to expand in the first seven months with an increased number of unit trust funds to 623 from 612 as at the end of last year.

The wholesale funds also continued to expand to 313 funds with additional 15 conventional funds and five Islamic funds. The net asset value of wholesale funds grew 14.7 per cent to RM96.9 billion.

On real estate investment trusts, the market capitalisation increased to RM41.1 billion while the total net asset value grew to RM46.9 billion as at end-July.

As at the same period, eight exchange traded funds (ETFs) were listed on Bursa Malaysia, including four syariah-compliant ETFs with a total market capitalisation of RM2.5 billion.

The Islamic capital market continued to grow, with 669 syariahcompliant securities listed on Bursa Malaysia as at end-July, representing 70.7 per cent of total listed securities, with a total market capitalisation of RM1.06 trillion.