PETALING JAYA: The Malaysian capital market saw a drop of almost 29% or RM52bil in total funds raised last year, amid lower secondary fundraising activities and a decline in corporate bonds and sukuk issuances.
In its 2023 Annual Report, the Securities Commission (SC) said total funds raised in the capital market moderated to RM127.7bil in 2023, compared to a high of RM179.4bil in 2022.
In the equity market, primary issuances slightly improved by 2.9% year-on-year to RM3.6bil via 32 initial public offerings, while secondary fundraising activities declined by nearly three-quarter to RM5.8bil.
In the corporate bonds and sukuk market, total issuances normalised to RM118.3bil in 2023, down from 2022’s RM153.3bil, following higher refinancing demand in the previous year.
“There was an exceptional surge in refinancing demand in 2022 amid the introduction of various relief programmes aimed at assisting issuers and intermediaries in their post-pandemic recovery.
“Total issuances remained healthy and in line with the 10-year average of RM111.2bil per annum,” the SC said.
Overall, the size of the capital market in 2023 slightly increased to RM3.8 trillion in 2023, out of which RM1.8 trillion was contributed by the equities market and RM2 trillion by the bond market.
The increase in overall capital market size was driven by broad-based growth in both total Bursa Malaysia market capitalisation and bonds and sukuk outstanding.
Similarly, the fund management industry expanded in 2023, with total assets under management (AUM) rising to a record-high of RM975.5bil, amid improvement in market value and greater asset allocation in developed markets.
The unit trust segment remained the largest source of funds, comprising 51.3% of total AUM.
Looking ahead, the SC expects the domestic capital market to remain stable, fair, and orderly, backed by sound economic fundamentals, ample domestic liquidity and a supportive policy environment.
Market activities will continue to be influenced by momentum in the domestic economy and corporate developments, with volatility likely to be driven primarily by uncertainties surrounding the global economy, particularly the direction of global monetary policy and evolving geopolitical tensions.
“Nevertheless, favourable momentum in the latter part of 2023 is expected to continue into 2024, underpinned by ongoing supportive policy actions under the Madani Economy framework, which includes the New Industrial Master Plan 2030 and the National Energy Transition Roadmap.
“These national policies are expected to provide a tailwind in the short to medium term, amid greater policy clarity and a continued commitment by the government towards improving medium-term economic growth prospects.
“Market expectations remained broadly positive, projecting the benchmark FBM KLCI to end 2024 at around 1,600 points,” according to the SC.
As for the Malaysian economy, the regulator said it is projected to remain on a steady growth trajectory in 2024, backed by firm domestic demand, primarily through continued expansion in private sector spending.
“The Finance Ministry expects growth of the Malaysian economy to accelerate to 4% to 5% in 2024 from 3.7% in 2023.
“However, risks to growth remain tilted to the downside given ongoing external challenges,” it added.
