FUNDS raised within Malaysia's equity and bond markets grew strongly to RM49bil in 2002, an increase of 11% compared with RM44bil in the previous year, the Securities Commission (SC) said in its annual report 2002 released yesterday.
SC chairman Datuk Ali Abdul Kadir said this was achieved despite challenging global market conditions and international geopolitical uncertainties.
He anticipates the country's capital markets to expand further this year.
“It will be buoyed by the resilient domestic economy and the government's proactive measures in economic management,” he said, adding that the recently announced economic package would positively impact the country's capital markets.
The SC report said there had been significant increases in equity issuance which more than doubled last year to RM13.3bil from RM6.2bil in 2001.
The two large initial public offerings for Maxis Communications Bhd and toll-road operator PLUS Expressways Bhd raised a combined total of RM5.4bil or 42% of total funds raised in 2002.
All the 51 new KLSE listings for last year were oversubscribed compared with 13 (out of 20) in the previous year. The number of listing proposals approved (42) was also higher, said the SC.
Ali said although the KLSE Composite Index had been affected by the adverse global conditions, it was less severely affected than other global markets.
“The index registered a 7.1% drop in 2002, which is less than other major markets, some of which fell as much as 40% over the corresponding period,” he said.
Ali said the bond market had also performed very well.
“It was an excellent year for Malaysian bonds – lifted by sovereign rating upgrades and reduction of credit spreads,” he said.
Improved domestic fundamentals had led to upgrades of the country's foreign currency credit rating and a reduction in credit spreads, said the SC.
Ali said despite the advancements in the capital markets, liquidity on the KLSE “has remained relatively subdued.”
He said the SC, working closely with the industry, the government and the Capital Market Advisory Council, had embarked on finding solutions to enhance liquidity and making the capital markets more vibrant and attractive to investors.
The measures include developing a strong base of premier companies on the KLSE, encouraging more active investor participation, developing focused and consistent communication and marketing strategies, as well as exploring alliances with other markets.
Ali called on the market players and stakeholders to play their part in enhancing liquidity by further developing their distribution channels and being more aggressive in attracting investors.
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