THE Malaysian capital market grew 12.6% to RM3.2 trillion, with total fundraising recording a five-year high of RM146.6 billion on the back of higher investor participation and improving sentiment, said the Securities Commission.

Last year, the capital market saw double-digit growth across all segments.

Equity market capitalisation increased 14.4%, while total bond and sukuk outstanding grew 10.1% to RM1.3 trillion.

The Islamic capital market increased by 11.9% to RM1.9 trillion, with Malaysia maintaining its leading position with a market share of 38% in global sukuk issuances.

The total fundraising amount was backed by a “strong upward momentum in private investments” in an “exceptionally strong” year, said SC chairman Ranjit Ajit Singh at the release of the commission’s 2017 annual report in Kuala Lumpur today.

Prior to 2017, the five-year fundraising average was RM116 billion per year.

Last year, RM124.9 billion was raised in the corporate and bond market, while RM14.5 billion was raised in the secondary equity market.

A total of RM7.2 billion was raised via 12 initial public offerings.

“Improved private investment reinforced the avenue for businesses to raise funding,” Ranjit told reporters.

Overall, he said, Malaysia’s capital market experienced a “significant” expansion from the 0.9% growth recorded in 2016, due to corporate earnings recovery and an improving economy.

RM124.9 billion was recorded in corporate bond and sukuk issuances last year, while fundraising through the equity market totalled RM21.7 billion, a jump from RM12.8 billion in 2016.

The fund management industry grew by 11.5%, with assets under management amounting to RM776.2 billion recorded last year, compared with RM696.3 billion in 2016.

The unit trust industry grew by 19.1% to RM427 billion in net asset value.

SC said 10 individuals were charged last year for securities-related offences.

It also filed civil actions against 20 individuals for breaches of securities laws.

A total of RM2.8 million in penalties was imposed, with a further RM8.9 million disgorged for investor restitution.

For this year, a “positive” overall outlook is projected for the country’s capital market, with even higher levels of growth across key market segments.

“The 14th general election is expected to drive investor sentiment in early 2018,” said the commission in its report.

“However, post-GE14, attention is expected to return to fundamentals of the capital market, which have been strong and are expected to continue improving.”

Earnings at public-listed firms are expected to be driven by improving trade and exports, a pick-up in commodity prices that support the plantation and oil and gas sectors, and stable domestic household spending, which supports consumer-related sectors.

The commission said higher interest rates may help support the financial sector, while the ringgit is still perceived to be undervalued, providing buying opportunities in the capital market. – March 15, 2018.