Islamic Finance 

Malaysian capital markets retains the RM3 trillon mark in 2018

| 14 March, 2019

MARCH 14, 2019 | 3:04PM MYT | KUALA LUMPUR

Malaysian capital market totalled at RM3.1 trillion last year, thus retaining levels above the RM3 trillion mark, according to the Securities Commission (SC) 2018 Annual Report published today.

At RM3.1 trillion, the overall capital market is equivalent to 2.2 times the size of the Malaysian domestic economy, said its chairman Datuk Syed Zaid Albar at the launch of the report earlier today.

“The overall capital market comprised of domestic bonds and sukuk outstanding, which rose to RM1.4 trillion and equity market capitalisation of RM1.7 trillion,” he said.

“On the buy-side, the fund management industry with assets under management of RM743.6 billion continued to play a key role in savings intermediation.”

However, given the challenging global environment and ongoing domestic policy reforms, domestic capital market witnessed a more moderate level of fundraising activities in 2018 with total funds raised amounting to RM114.6 billion.

Total corporate bonds and sukuk issuance for 2018 stood at RM105.4 billion, thus exceeding the five year average of RM97.7 billion with new issuances mainly in utilities and financial services.

Another RM9.2 billion worth of bonds were raised via the equity market.

In line with Malaysia’s standing as the premier global Islamic financial hub, Sukuk made up 68.9 per cent of total issuances in 2018.

“Despite emerging competition, Malaysia remained a global leader in the Islamic capital market with RM1.9 trillion in Shariah-compliant equity and sukuk outstanding,” said Syed Zaid.

Meanwhile, out of the total funds raised in the equity market, RM0.7 billion was raised via initial public offerings (IPOs) with 21 new equity listings in the primary market, and RM8.5 billion via secondary fundraising.

Two companies were listed on the Main Market, nine companies on the ACE market and the remainder on the LEAP Market, in 2018.

Going forward into 2019, Syed Zaid expect Malaysian economy to remain on a steady growth path this year backed by domestic private sector activities, despite expected challenges from an uncertain global environment.

“Growth will be underpinned by sustained manufacturing activities and resilient services sector expansion, especially in wholesale and retail trade sub-sectors,” he said.

“The government’s effort to promote the adoption of digital technology and automation will also be an important catalyst for future investment activities.”

He stressed that despite the challenges, Malaysia is still very much on track to becoming a high-income country in the coming decade.

“The progressive development of the domestic capital market will enable it to continue to play an instrumental role in supporting longer-term economic growth through financing of business expansion and infrastructure investment as Malaysia transitions towards becoming a high-income country in the coming decade,” he said.

As a whole, the outlook for the Malaysia domestic capital market in 2019 will continue to be influenced by key global developments, especially on global monetary policy, uncertainty surrounding major risks and ongoing trade tension.

Copyright New Straits Times