Friday, March 14, 2014

Malaysian Capital Market Grows 10.5% In 2013

PETALING JAYA: The Malaysian capital market grew by 10.5% to RM2.7 trillion in 2013, driven by steady growth in key market segments on the back of robust domestic fundamentals, said the Securities Commission Malaysia (SC). 

SC in its annual report 2013 released yesterday, said the market remained resilient despite volatility which affected emerging markets globally. 

It said the bond market ended the year at RM1 trillion and maintained its position as the third-largest in Asia relative to gross domestic product (GDP) while equity market capitalisation grew to RM1.7 trillion with the benchmark index rising 10.5%, making the market one of the top performers in Asia. 
 SC said significant gains were also recorded by the domestic small-cap index following increased participation from institutional funds and greater interest by retail investors. 

It said the capital market continued to be a major source of financing with RM94 billion raised through corporate bonds and initial public offerings (IPOs). It said bond issuances accounted for 91% of financing raised. 

The breadth and depth of the market underpinned the strongest period of capital-raising on record with a total of RM240 billion raised over the last two years, it said. 

The SC said the fund management industry continued to play an important role in mobilising domestic savings, with assets under management (AUM) growing by 16.5% to RM588 billion. 

It said unit trust funds continued to be the largest contributor to the growth in AUM, with net asset value increasing to RM336 billion, equivalent to one-fifth of stock market capitalisation. 

The SC said the Islamic capital market grew by 8.8% to RM1.5 trillion, with syariah-compliant assets representing 56% of the overall capital market. 

It said Malaysia maintained its leadership role as the world's largest sukuk market, accounting for 69% of global sukuk issuances in 2013. 

A revised syariah screening methodology for listed equities was implemented in November 2013 to further increase the attractiveness of Malaysia's Islamic equity and fund management segments to international investors, it said. 

In 2014, SC's regulatory agenda will focus on enhancing efficiencies and reducing time to market, further strengthening regulation and supervision of market institutions and facilitating market access. 

The SC and regional regulators will collaborate to implement the Asean Capital Markets Forum framework for the cross-border offering of collective investment schemes in the first half of 2014. 

The commission said it will also facilitate more cross-border and multi-currency bond and sukuk issuances as well as assess potential new fixed income products such as high-yield bonds with a view to broaden the credit spectrum of investible asset classes. 

Leveraging on Malaysia's significant Islamic fund management segment, the SC said it will continue to work with the industry to build their capabilities and enhance cross-border linkages. 

The SR-i Sukuk guidelines will be introduced this year to facilitate syariah-compliant financing for and investments into socially responsible businesses, it added.


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