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Friday March 18, 2011

Malaysia's capital market crosses RM2tril

Annual compounded growth rate at 11%

PETALING JAYA: Malaysia's capital market crossed the RM2 trillion threshold for the first time ever as at end-2010, said Securities Commission (SC) chairman Tan Sri Zarinah Anwar.

In releasing the SC's Annual Report 2010 yesterday, Zarinah noted that the capital market had achieved an annual compounded growth rate of 11% from RM717bil in 2000 due to rapid industry expansion and strong regulatory oversight that underpinned investor confidence in the Malaysian capital market.

“Equity market capitalisation grew by 27% from RM979bil in 2009 to RM1.2 trillion in 2010 as the market sentiment improved on the back of the launch of new economic programmes.

“The FBM KLCI also closed at an all-time high of 1,528.01 points on Nov 10 and has consistently outperformed emerging and advanced market indices.

“The FBM KLCI rose by 19% for the year, compared with the MSCI Emerging Market Index's 16% and the MSCI World Index's 10% (rise),” she said.

Zarinah said the initial public offering (IPO) market was also buoyant with 29 new listings in 2010.

“This was double the 14 listings recorded in 2009. The new listings raised RM19.79bil, with Petronas Chemicals Group Bhd having the distinction of being the largest IPO in Malaysia and South-East Asia and successfully raising RM12.8bil in November 2010,” she said.

The bond market also posted steady growth with outstanding debt securities rising 16.2% from RM653.2bil in 2009 to RM758.7bil last year.

Zarinah also said the size of the market that was syariah-compliant (Islamic capital market) had exceeded RM1 trillion, having recorded a growth of 15.2%. The number of Islamic fund management companies also increased to 15 with the approval of four new licences.

She said the SC had during the year intensified its prudential and conduct supervision of market institutions and intermediaries, and enhanced its oversight functions.

“There were increased engagements with intermediaries and public-listed companies over a broad range of regulatory concerns, including client asset protection requirements with the fund management industry, governance structures, internal audit and risk management functions of bond trustees, and the reporting on assets by custodians,” Zarinah said.

On criminal cases, she said the SC had secured 15 convictions and completed five civil proceedings.

New market opportunities were also initiated through various cross-border regulatory arrangements to facilitate domestic intermediaries to expand their operations across borders, as well as promote greater inflows into Malaysia's capital market.

“The SC secured China's approval for Malaysia to be recognised as an approved investment destination under China's Qualified Domestic Institutional Investor (QDII) scheme administered by the China Banking Regulatory Commission in June.

“Malaysia became the first emerging market and second Asean country to be placed under the QDII scheme. The QDII programme allows Chinese nationals to invest in overseas markets through approved institutions such as securities companies, fund management companies, commercial banks, trust companies and insurance companies,” Zarinah said.

For 2011, she said the priorities were to further strengthen the positioning of the capital market to meet future fund-raising requirements for the Economic Transformation Programme, as well as meet national aspirations for socially inclusive and sustainable growth.

Zarinah said work was also progressing smoothly on a new five-year corporate governance blueprint and the 10-year Capital Market Masterplan 2 that were intended to articulate Malaysia's strategies and agenda for the development and regulation of the capital market for this decade.

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