Kuala Lumpur: – The Securities Commission Malaysia (SC) expects fundraising activities in the Malaysian capital market to hit MYR80 billion ($19.39 billion) in 2016, 11 per cent lower than the MYR90 billion ($21.81 billion) raised last year.
Of the estimated MYR80 billion, SC chairman Ranjit Ajit Singh said MYR75 billion ($18.18 billion) is expected to be from bonds, and MYR5 billion ($1.21 billion) from initial public offerings (IPO).
The secondary market is estimated to raise MYR17 billion to MYR18 billion ($4.12-4.36 billion) this year, taking a leaf from similar trend in the previous years.
“There are a host of factors behind these figures, these are estimates based on (information from) those who have been engaging with us, assessments that we have taken, and discussions with investment bankers. Based on these, we have an approximation,” he told the press at the launch of the SC’s 2015 annual report on Thursday.
Singh noted that while the expectations were conservative, the Malaysian market has seen consistent capital raising, against the backdrop of external volatility. This steady capital flow, he said, is expected to sustain.
Among the highlights of the annual report, the SC noted that the Malaysian capital market grew across all segments, expanding 2.1 per cent to MYR2.82 trillion ($680 billion), equivalent to the 2.5 times of the size of the domestic economy.
The equity market increased 2.6 per cent to MYR1.7 trillion, from MYR1.65 trillion in 2014; while the bond and sukuk (Islamic bond) market grew by 1.4 per cent to MYR1.12 trillion. Malaysian remains the third-largest bond market in Asia, and is leading in the sukuk market with 54.3 per cent of the global sukuk outstanding.
Islamic capital market expanded 6.7 per cent to MYR1.7 trillion, with market capitalisation of shariah-compliant securities at MYR1.09 trillion, representing 64.1 per cent of the total market capitalisation.
Within the fund management industry, Malaysia registered a 6 per cent growth with asset under management (AUM), hitting MYR668 billion ($166.73 billion) in 2015.
Looking back on the statutory body’s achievements last year, Singh highlighted that Malaysia has been granted the full membership in the inter-governmental policymaking body Financial Action Task Force (FATF), as part of the measures to combat money laundering activities.
SC executive director Foo Lee Mei said: “We went through the exercise, and essentially, our financial and supervisory framework as well as our legal framework were found to be highly compliant.
Full-member countries under the FATF are granted certain recognitions which will make the handling of cross-border transactions easier.
The SC has also obtained the approval to set up International Organisation of Securities Commissions’ (IOSCO) first regional office outside of Madrid, Spain, in Kuala Lumpur.
Originally published on www.dealstreetasia.com