Malaysia’s total funds raised reach record RM179.4b in 2022: Securities Commission

[KUALA LUMPUR] MALAYSIA’S capital market continued to expand in 2022, with total funds raised reaching a record RM179.4 billion (S$54.3 billion), a 36.6 per cent increase from RM131.3 billion in 2021.

Announcing this on Monday (Mar 27), the Securities Commission Malaysia said that the capital market remained “resilient and orderly” in 2022, despite an increasingly pessimistic global economic outlook and tighter global financial conditions.

The funds raised for 2022 also exceeded the five-year pre-pandemic average of RM121.4 billion, said the commission’s executive chairman Awang Adek at a media briefing in conjunction with the release of its latest annual report.

He attributed this to the strong performance in corporate bond and sukuk issuances, which rose more than 34 per cent to RM153.3 billion in 2022 amid increased global market volatility.

Overall, the size of Malaysia’s capital market rose slightly to RM3.6 trillion last year, up from RM3.5 trillion in 2021, with the drop in equity market capitalisation offset by higher bonds and sukuk outstanding.

Awang said that the capital market continued to be affected by global and domestic headwinds that led domestic equity and bond markets to perform weaker last year. Nevertheless, in terms of portfolio flows, the equity market recorded net inflows of RM4.4 billion by foreign investors, the first time there has been a net inflow since 2017. 

In 2022, total bonds and sukuk outstanding grew to RM1.9 trillion last year, from RM1.7 trillion in 2021.

Fundraising activities in equity crowdfunding (ECF) and peer-to-peer (P2P) platforms also experienced robust growth, with total funds raised rising 26 per cent to RM1.7 billion.

Awang added that since their inception, the ECF and P2P platforms have helped some 7,200 micro, small and medium-sized enterprises to raise over RM4.4 billion.

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He also said that in the fund management industry, assets under management declined 5 per cent to RM906.5 billion last year. The global capital market also registered a weaker performance last year, amid the continued tightening of financial conditions in major markets, inflationary pressures and the repercussions of the ongoing Russia-led war in Ukraine.

The recent fallout of global financial institutions such as Credit Suisse and Silicon Valley Bank has also worsened conditions somewhat.

“Although Malaysia’s general sentiment has improved, we are not spared from global uncertainties. We hope things will stabilise by the middle of this year, and we will see more activities in Malaysia’s capital market,” said Awang.

Commenting on the Credit Suisse crisis which has affected investors globally, he noted that the overall exposure to Credit Suisse’s Additional Tier-1 (AT1) bonds in Malaysia’s fund management industry is not significant, and that the risk is contained.

In Malaysia, there are two wholesale funds – both managed by Aham Capital Asset Management – that have single and direct exposure to the AT1 bonds. Awang said that the exposure amount is less than 0.1 per cent of the firm’s RM77 billion worth of total assets under management.