Wednesday, 23 March 2016

Malaysian capital market continues to expand in 2015 despite headwinds — SC

March 11, 2016, Friday

Ranjit said RM86 billion was raised through the issuance of private debt securities (PDS) and RM4 billion via initial public offerings.
Ranjit said RM86 billion was raised through the issuance of private debt securities (PDS) and RM4 billion via initial public offerings.
KUALA LUMPUR: Notwithstanding various headwinds, the Malaysian capital market continued to expand in 2015 to reach RM2.82 trillion in size compared with RM2.76 trillion in 2014, the Securities Commission said.
Growth was driven by the equity market which grew from RM1,651 billion in 2014 to RM1,695 billion by end-2015 while the bond market improved to RM1,125 billion against RM1,110 billion registered in the previous year, said Chairman Datuk Seri Ranjit Ajit Singh in the SC Annual Report 2015.
“Such expansion attests to the sustained ability of issuers to obtain long-term financing from the Malaysian capital market, as fundraising activity remained robust throughout the year,” he said.
Ranjit said RM86 billion was raised through the issuance of private debt securities (PDS) and RM4 billion via initial public offerings (IPOs), bringing the total funds raised through the primary market to RM90 billion in 2015 compared with RM92 billion in 2014.
Meanwhile, a sustained expansion in buy-side liquidity over the year also contributed towards the relative resilience of the capital market, with assets under management (AUM) by fund management companies rising by six per cent to RM668 billion in 2015 from RM630 billion in 2014.
Unit trust funds continued to be the largest source of clients’ AUM with net asset value of RM347 billion by end-2015 compared with RM343 billion in 2014.
The unit trust industry, which is an important proxy for retail investor confidence in the capital market, also recorded surplus sales over redemptions, with the number of units in circulation growing from 425 billion in 2014 to 458 billion in 2015.
While the capital market recorded net portfolio outflows in 2015 in line with global emerging market trends, the value of foreign ownership in the corporate bond market increased slightly from RM13.9 billion in 2014 to RM14.0 billion by end-2015.
Liquidation of foreign portfolio positions in the equity market also took place at a measured pace, with the FBMKLCI recording a decline of -3.9 per cent compared with the MSCI Emerging Markets index which fell -17 per cent over the same period, said the report.
In 2015, Ranjit said the SC continued to diversify channels for financing and investments while broadening access to the capital market by pursuing measures to deepen existing market segments and nurturing new growth areas.
One such area of focus was the Islamic capital market, where Malaysia had firmly established its reputation as a global leader in Islamic finance and the world’s largest issuer of sukuk.
He said extensive work was underway in formulating a roadmap which articulated the SC’s strategy to establish Malaysia as a global Islamic fund and wealth management hub, the release of which was slated for 2016.
Another key market developmental thrust is SC’s ongoing efforts to facilitate access to market-based financing for early and growth-stage companies.
“One of our first initiatives in this regard is the establishment of a regulatory safe harbour for equity crowdfunding (ECF), a class of fundraising activity which enables entrepreneurs to obtain market-based financing for start-ups and early-stage companies,” Ranjit said.
In February 2015, SC became the first regulator in the region to introduce a framework for ECF, with six applicants subsequently approved to become registered ECF platform operators in Malaysia.
Also, as a long-standing champion of initiatives to strengthen the quality of corporate governance in Malaysia, the SC recently concluded the implementation period of the Corporate Governance Blueprint 2011 with 83 per cent of its recommendations already fully implemented.
Moving forward, near-term deliverables included revisions to the Malaysian Code on Corporate Governance 2012, as well as, the release of the Corporate Governance Priorities 2020 which will detail SC’s initiatives for the next five years, he added. — Bernama

Read more:

No comments: