KUALA LUMPUR: The Malaysian capital market is expected to remain positive, with total capital raising through primary and secondary markets estimated at about RM120 billion this year.
The Securities Commission (SC) estimates fund raising through corporate bonds and sukuks, or Islamic bonds to total about RM100 billion this year, easing from from RM124.9 billion last year.
Equity fundraising, on the other hand, is expected to be about RM20 billion, with RM8 billion to be raised via initial public offerings (IPO).
The remaining RM12 billion will be raised through the secondary market, the SC said in its annual report 2017.
The SC said overall fund raising totalled RM146.6 billion last year, surpassing the five-year average of RM116 billion, which underscored the capital market’s continuing ability to provide a facilitative and effective avenue for capital formation.
“A strong upward momentum in business activity was reflected in corporate bond and sukuk issuances, which at RM124.9 billion, exceeded the RM100 billion mark for the first time since 2012,” it added.
With improvements in market fundamentals and valuations, fund raising through the equity market amounted to RM21.7 billion compared to RM12.8 billion the previous year, it added.
The SC said the impending 14th general election was expected to drive investor sentiment early this year.
However, the attention is expected to return to fundamentals of the capital market, which has been strong and is expected to continue improving.
“The Malaysian capital market is expected to benefit from the country’s strong economic fundamentals. Furthermore, the sustained interest in emerging markets is expected to be advantageous to the Malaysian capital market as a whole,” it said.
“The domestic capital market will continue to play a major role in supporting economic growth through financing of business expansion and infrastructure development,” it added.
The SC said listed companies are expected to see earnings recovery since 2016 to continue into 2018.
“Specific drivers of earnings growth include improving trade and exports, pick-up in commodity prices which support the plantations and oil and gas sectors, stable domestic household expenditure which support consumer-related sectors and possible higher rates should lend support to the finance sector,” it said.