KUALA LUMPUR – The Malaysian capital market continues to play a central role in financing the domestic economy and mobilising savings despite challenging conditions in 2020.
The Securities Commission Malaysia (SC), while releasing its Annual Report 2020 yesterday, said that the capital market expanded 7% to RM3.4 trillion in 2020 as compared to RM3.2 trillion in 2019.
Both the local equity and bond markets recovered from the pandemic lows, outperforming regional peers. Total funds raised via the equity and corporate bond markets were at RM115 billion, supported by a 76% increase in secondary issuances of equities.
Equity Crowdfunding (ECF) and Peer-to-Peer (P2P) financing also recorded continued growth momentum, increasing by 43% from a year ago, raising RM631 million for the Micro, Small and Medium Enterprises (MSMEs). Overall assets under management (AUM) saw resilient growth of 10% in 2020 to RM905.5 billion, reflecting stronger investor interest in the capital market.
Net Asset Value (NAV) of unit trusts and private retirement scheme industry also rose to RM519.5 billion and RM4.8 billion respectively. The AUM growth was achieved despite redemption pressures during the height of the market sell-down.
Datuk Syed Zaid said that in 2020, the SC had recalibrated its priorities to enable the regulator and capital market participants to address and respond to the impact of the pandemic while ensuring market stability and continuity.
At the onset of the pandemic, the SC introduced a wide array of regulatory flexibilities and relief measures to ensure business continuity and facilitate orderly market operations, including time extensions for filings, fee waivers and exemptions. 389 PLCs benefitted from various listing fee waivers while 47 PLCs announced fundraising exercises under increased and general mandates. 544 hybrid and fully virtual general meetings were also conducted.
“Our priorities for 2021 will be centred on the developments we see within the industry. As the Malaysian economy and companies continue with their recovery momentum, the SC will focus on ensuring that more businesses, including the MSMEs and Mid-Tier Companies can fundraise through the capital market, in tandem with the government’s focus on developing high-growth companies in the green and digital economy.
“Digital development will continue to be a core industry agenda, and as such, a key priority at the SC. This will entail the facilitation of more innovative intermediation within the capital market, and a greater focus on the industry’s capabilities to manage technology risks, including cyber risks.
“At the SC, we will strengthen regulatory capabilities on risk surveillance and see greater use of technology and machine learning across our regulatory functions from supervision to enforcement. Along with the increased focus on ESG, the SC will also prioritise the growth of Sustainable and Responsible Investments (SRI) and continue to leverage on the Islamic capital market to drive SRI,” said the SC.