THE capital market continues to be a major source of funding for companies in the country, with the Securities Commission (SC) approving corporate proposals to raise RM55.1bil in total last year compared with RM65.9bil in 2002.
Of the total for 2003, 86% or RM47.3bil was to be raised via debt instruments, signifying greater maturity for the capital market and the success of the SC's policy to streamline and enhance the debt market as a medium for capital-raising activities.
The SC said in a statement issued in conjunction with the release of its 2003 annual report (see page 4) that bonds accounted for more than 80% of the total funds to be raised from the capital market.
The balance of RM7.8bil was to be raised via initial public offerings (RM3.88bil), equity (RM3.87bil) and preference shares (RM7.5mil).
There were 33 submissions for IPOs last year, 44 for fund-raising via equity, 64 submissions comprising of 118 issues for fund-raising via debt, and one for preference shares.
As for the Islamic capital market, the SC said it had continued to grow steadily in the past year with Islamic bonds accounting for RM8.1bil or 19% of the total funds raised in the bond market.
The commission said that of great significance was its work with the Government on tax incentives for Islamic securities, which came to fruition last year.
Work to enhance greater clarity and guidance based on syariah principles for the market on unit trusts and on asset-backed securities also continued to support the growth of the Islamic capital market, it added.
The SC said heightened pre-emptive surveillance coupled with strengthened enforcement marked its drive last year for a capital market of high integrity.
This was balanced with strong steps to push the market to greater levels of efficiency and sophistication.
The SC's enforcement work was increasingly being reinforced by proactive corporate surveillance - a feature that would be further emphasised going forward.
The commission said it was also determined to create an environment “which is business friendly and with no more regulation than necessary”, and had continued to ensure that the capital market processes were streamlined, simplified and made more efficient.
On the economic and financial outlook, the SC said the prospects for global economic and financial conditions, especially in the first half of this year, had brightened considerably.
It said strong global growth, an acceleration in intra-regional trade and healthy domestic demand should bolster the prospects for the Malaysian economy.
“Healthy economic conditions favour a shift in portfolio allocations into equities globally and domestically unless interest rates rise faster and more sharply than anticipated or earnings growth fails to live up to expectations,” it added.
The SC said the Malaysian equity market this year would be supported by favourable global conditions as well as renewed optimism on the domestic situation.
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