KUCHING: The domestic capital market will boost the Malaysian economy, with the total size of the capital market expanding to RM3.2 trillion in 2019, the Securities Commission Malaysia (SC) revealed in its 2019 annual report yesterday.
According to SC, the total size of the capital market expanded to RM3.2 trillion in 2019 from RM3.1 trillion the year before, with debt securities outstanding and equity market capitalisation of RM1.5 trillion and RM1.7 trillion respectively.
“Notwithstanding the challenging global backdrop and ongoing domestic policy reforms, the Malaysian capital market witnessed a higher level of fundraising activities during the year, with total funds raised in the bond and equity market amounting to RM139.4 billion in 2019 compared to RM114.6 billion in 2018,” the annual report revealed.
“Alternative fundraising avenues have also continued to gain traction, especially in ECF and P2P financing, with total funds raised more than doubled to RM443.8 million.”
SC highlighted that a total of RM132.8 billion was raised in the corporate bond and sukuk market compared to RM105.4 billion in 2018, with issuances mainly in utilities and financial services.
It also highlighted that sukuk made up 77.1 per cent of total bond issuances in 2019.
“Meanwhile, RM6.6 billion was raised via the equity market, of which RM2 billion was through new equity listings with a total of 30 IPOs and RM4.6 billion raised via secondary fundraising.
“In 2019, four companies were listed on the Main Market, 11 companies on the ACE Market, and the remaining on the LEAP Market. Notably, the size of issuances via the LEAP Market grew by 60.6 per cent y-o-y to RM92.2 million in 2019.”
As for the fund management industry, SC noted that total AUM rose to RM823.2 billion amidst an increase in market value, driven by robust performance of small and mid-cap equities and higher net injection from dividend reinvestment.
“Total net sales for the unit trust segment amounted to RM30.5 billion in 2019, a decrease of -19.5 per cent y-o-y.”
In terms of portfolio flows, the annual report revealed that total non-resident inflows amounted to RM8.7 billion in 2019, mirroring regional trends.
“The bond market recorded total inflows of RM19.9 billion (2018: outflows of -RM21.9 billion) while the equity market recorded total outflows of -RM11.1 billion (2018: outflows of -RM11.7 billion).
“In the bond market, nonresidents accounted for 13.7 per cent of total outstanding ringgit bonds as at end December – most of which were Malaysian Government Securities (MGS) at 80.1 per cent of total foreign holdings.
“In the equity market, foreign holdings remained stable at 22.4 per cent of total market capitalisation in 2019, in line with its five-year average.
“The high level of domestic liquidity in the capital market continued to allow for orderly market adjustments of fund flows between non-residents and local investors.”