KUALA LUMPUR: The decline of fundraising in Malaysia's equity and corporate bond markets last year is not an indication of a market slowdown.
Securities Commission (SC) chairman Datuk Seri Dr Awang Adek Hussin said this was because of the two exceptionally large issuances in 2022.
Fundraising in the equity and corporate bond markets moderated to RM127.7 billion last year from RM179.4 billion in 2022, with corporate bond and sukuk issuances declining due to lower refinancing demand, as well as a drop in secondary equity fundraising.
Secondary equity fundraising is returning to pre-Covid-19 pandemic levels, although it slipped to RM5.8 billion compared to RM22.6 billion in 2022.
"The 2022 figure was exceptional on two accounts. One was the special issuance for the CelcomDigi Bhd merger of RM14 billion. The second was the exceptional PLUS bonds of RM31 billion.
"The two together totalled RM45 billion in what could be considered exceptional for 2022. I do not want to give the impression that the market came down in 2023," he said at the release of the SC's annual report yesterday.
Proceeds raised from the initial public offerings (IPOs) also improved to RM3.6 billion from RM3.5 billion in 2022.
Although the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) dropped 2.7 per cent to end the year at 1,454.66 points, Awang Adek said other market indices ended positively, reflecting investors' interest in firms with higher growth potential, particularly in the mid and small-cap segments.
"Currently, the domestic equity market is among the best performing markets in the region, with FBM KLCI gaining almost seven per cent as of March 12," he said.
For this year, the regulatory body is expecting between 40 and 42 IPOs.
Overall, the Malaysian capital market remained resilient last year after recording a growth of 5.6 per cent to RM3.8 trillion (2022: RM3.6 trillion), driven by the growth in total equity market capitalisation as well as bonds and sukuk outstanding.
The annual report also noted that the fund management industry grew strongly with total assets under management hitting a new high of RM975.5 billion (2022: RM906.5 billion), largely supported by positive valuation effects.
The SC also released the Audit Oversight Board Annual Report 2023 and the Capital Market Stability Review 2023.
Awang Adek said the strong capital market performance was achieved despite global economic challenges and diverging expectations of monetary policies in major economies.
The Malaysian Islamic capital market grew 4.5 per cent to RM2.4 trillion last year, with sukuk outstanding growing by 7.4 per cent and syariah-compliant equities by 1.5 per cent.
In 2023, the SC secured five criminal convictions and RM8.7 million in fines, along with RM4.8 million civil penalties imposed by the courts. The SC also disgorged RM13.8 million pursuant to regulatory settlements entered into with six persons in separate cases.
"Additionally, 140 administrative sanctions were imposed. This resulted in the SC imposing fines and penalties amounting to RM19.5 million," he said.
The SC received 3,262 complaints and enquiries on scams and unlicensed activities last year, a three-fold increase over the last five years from 2019 to 2023.
It stepped up efforts to protect investors and combat scams by establishing an internal task force to coordinate anti-scam interventions, enhancing the investor alert page and developing tools like the investment checker and scam metre for investors.
Key initiatives for the public markets include the introduction of an accelerated transfer process from the ACE Market to the Main Market, facilitated reduction of stamp duty for share trading on Bursa Malaysia to lower costs for retail investors and fractional share trading to improve access to the stock market.
"Additionally, in collaboration with Bursa Malaysia, IPO approvals for the Main Market and ACE Market were expedited to a three-month period for new applications received from March 1."
The SC remains committed to advancing Malaysia's capital market and supporting its transition towards a low-carbon economy.
"The SC is looking to refine the SRI Taxonomy and develop the National Sustainability Reporting Framework to guide industry participants towards aligning with global sustainability standards.
"The SC is also conducting a comprehensive review of the Capital Market Services Act 2007 and the Securities Commission Malaysia Act 1993 to ensure their relevance and in keeping up with the changes in the market," said Awang Adek.