by RUPINDER SINGH / pic TMR

TOTAL funds raised in Malaysia capital markets rose to RM179.4 billion last year, the highest ever, led by a record amount of corporate bond and sukuk issuances, says Securities Commission (SC).

“Total funds raised in the capital market increased to RM179.4 billion in 2022 (2021: RM131.3 billion), of which RM26 billion was raised via the equity market, while RM153.3 billion was issued through the corporate bond market.

“Likewise, alternative fundraising avenues via equity crowdfunding and peer-to-peer financing rose in 2022, and continued to support micro, small and medium enterprises’ funding needs,” the SC said in its Annual Report 2022 released today.

Amid a year marked by heightened global market volatility and strong headwinds across multiple asset classes, the SC said the country’s capital market remained resilient.

Meanwhile, it said, the fund management industry experienced weaker market valuation and net redemptions in 2022, with AUM totalling RM906.5 billion (2021: RM951.1 billion).

The SC said that the unit trust segment remained the largest source of funds for AUM.

Overall, it said the size of the capital market rose to RM3.6 trillion in 2022 (2021: RM3.5 trillion), as the drop in equity market capitalisation was offset by higher bonds and sukuk outstanding.

“Despite the challenging environment, the domestic capital market remained orderly and continued to facilitate fundraising and savings intermediation effectively,” the SC said.

The SC said the domestic equity market was affected by persistent headwinds both globally and domestically.

The overall market capitalisation of Bursa Malaysia and the FBMKLCI moderated to RM1.74 trillion and RM1.03 trillion respectively in 2022 (2021: RM1.79 trillion and RM1.04 trillion respectively).

Likewise, the FBMKLCI index declined by 4.6% to end the year at 1,495.49 points.

In terms of trade participation, it reported that local institutions remained net sellers to a total of RM6.53 billion in 2022.

Correspondingly, non-residents turned net buyers after four consecutive years of net-sell, with total net buy amounting to RM4.40 billion (2021: -RM3.15 billion), while net buying by local retail investors totalled RM2.13 billion.

In terms of value traded, SC said the participation rate for retail investors declined to an average of 25.7% in 2022 (2021: 34.6%), but remained above the five-year pre-pandemic average of 18.8%.

Meanwhile, the average daily trading volume also moderated in 2022 to 3 billion (2021: 5.85 billion), valued at an average of RM2.18 billion per day (2021: RM3.66 billion).

In the Malaysian bond market, it said total bonds and sukuk outstanding grew to RM1.9 trillion in 2022 from RM1.7 trillion in 2021, reflecting higher levels of bond and sukuk fundraising in the market.

It said that the overall Malaysian Government Securities (MGS) yield curve shifted upward, tracking the movements of the global bond market.

“This was driven by expectations of continued monetary policy normalisation globally and domestically, given elevated inflationary pressures,” it said.

It also noted that the spread between corporate bonds and MGS widened across major tenures, except for 3-year notes.

Meanwhile, the domestic bond market witnessed lower foreign interest, with net outflows amounting to RM9.8 billion in 2022 (2021: net inflow of RM33.6 billion).