KUALA LUMPUR: Strong buying interest in the local bourse, followed by a slew of initial public offerings (IPOs) and growth in total outstanding for the bond and sukuk market has resulted in an increase in the size of the capital market by 9.7 per cent to RM4.2 trillion in 2024 from RM3.8 trillion in 2023.
The Securities Commission Malaysia (SC) said in its Annual Report 2024 released today that the Malaysian capital market outperformed most of its regional peers despite recording net foreign equity outflows, supported by strong buying interest from several local institutional investors, stable political and macroeconomic conditions, and recovery of the ringgit against major currencies.
It noted that the Malaysian capital market remained resilient and orderly while continuing to serve its fundamental role in enabling and facilitating capital-raising to fund the domestic economy.
Meanwhile, the SC said that the fund management industry expanded in 2024, with total assets under management (AUM) rising to a record high of RM1.1 trillion (2023: RM975.5 billion), driven by strong global equity market performance, particularly artificial intelligence (AI)-related valuations in the US market.
The unit trust segment remained the largest source of funds, constituting 51.1 per cent of the total AUM (2023: 51.3 per cent).
"Total funds raised in the capital market grew to RM138.9 billion in 2024 compared with RM127.7 billion in 2023, of which RM14.7 billion was raised through the equity market, while RM124.2 billion was issued through the corporate bond market,” it said.
On the performance of the Malaysian equity market, the SC said it was largely driven by a series of domestic factors including further clarity in national policy rollouts, fiscal consolidation measures such as diesel subsidy rationalisation, favourable earnings growth, and corporate activities.
The overall market capitalisation of the local bourse ended higher at RM2.1 trillion in 2024 from RM1.8 trillion in the previous year, while that of the FTSE Bursa Malaysia KLCI components rose to RM1.2 trillion compared with RM1.0 trillion in 2023.
It also said that both headline inflation and core inflation moderated despite higher utilities and transportation prices following fiscal policy adjustments during the year, reflecting minimal cost pass-through effects.
In the Malaysian bond market, the SC said total bonds and sukuk outstanding grew to RM2.10 trillion from RM2.01 trillion in 2023, underpinned by the continued issuance of bond and sukuk, particularly government bonds.
Moving forward, the SC said the Malaysian economy is projected to remain on a steady growth trajectory in 2025, buoyed by continued strength in domestic demand, primarily through continued expansion in private sector spending and investment.
"The ongoing rollout of government economic plans will continue to add support to the economy, while the recovery of the Malaysian ringgit will lift consumer spending activity,” it said.
In the domestic capital market, it said activity will likely be driven by the momentum in the domestic economy, while volatility is likely to be influenced primarily by uncertainties surrounding geopolitical instability, regulatory and policy issues as well as growth in certain segments of advanced economies.
"Nevertheless, continued supportive policy actions under the MADANI Economy framework and the implementation of the National Economic Plans are expected to provide a tailwind in the medium-term,” it added. - Bernama
