By NG MIN SHEN/FILE PIX
Total fundraising from the local capital market is anticipated to reach RM120 billion this year, lower than the record RM146.6 billion posted in 2017.
The Securities Commission Malaysia (SC) said the capital fundraising, a large portion will come from bonds and Islamic debt papers, will largely be used to fund infrastructure projects and to refinance the current bonds and sukuk.
“Fundraising through the corporate bond and sukuk market is expected to amount to about RM100 billion. Equity fundraising is expected to be approximately RM20 billion with RM8 billion to raised via initial public listings (IPOs) and the remaining RM12 billion via the secondary market,” it said in its annual report released today.
The regulator said the outlook of the country’s capital market this year is positive due to the improving macro fundamentals, the ringgit’s strengthening and the favourable investors sentiment.
Earnings for listed companies which have been rising since 2016, are expected to continue this year.
The better earnings prospects are largely due to the improving trade and exports, pick-up in commodity prices, and the stable domestic household expenditure. The possibility of more interest rate hikes would support the financial sector.
Of the total fundraising in 2017, RM124.9 billion was raised from the corporate and bond market, RM7.2 billion (12 IPOs), and RM14.5 billion in the secondary equity market.
“A strong upward momentum in business activity was reflected in corporate bond and sukuk issuances, which exceeded the RM100 billion mark for the first time since 2012,” SC chairman Tan Sri Ranjit Ajit Singh said.
According to the report, the Malaysian capital market grew 12.6% to RM3.2 trillion in 2017, while equity market capitalisation rose 14.4% to RM1.9 trillion.
Bonds and sukuk outstanding climbed 10.1% to RM1.3 trillion, while the Islamic capital market expanded 11.9% to RM1.9 trillion.