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Malaysia sees companies raising up to RM105b of capital in 2017
[KUALA LUMPUR] Malaysian companies are likely to raise RM90-105 billion (S$28.8-S$33.6 billion) of capital in 2017, roughly in line with last year, the head of the Securities Commission forecast on Thursday.
Malaysian firms raised close to RM100 billion in 2016, of which about RM87 billion was through corporate bond issuances and initial public offerings (IPOs), commision Chairman Ranjit Ajit Singh said in a speech at an event.
Mr Ranjit said a substantial portion of the financing in 2016 was through the conventional bond and sukuk markets.
Malaysia has been hard hit by capital outflows from emerging markets as investors expect US interest rates to rise faster under a Trump administration.
The currency market has also been volatile, prompting the central bank to introduce measures to curb offshore trade of the ringgit, which was one of Asia's worst performers in 2016.
Second finance minister Johari Abdul Ghani said on the sidelines of the event that the government was sticking to its forecast that the economy will grow by 4-5 per cent in 2017, and maintained that the currency will rebound.
"Any government in the world, if you have the currency come down so drastically, (the government) needs to do some adjustment on that," Mr Johari told reporters. "Nevertheless, because our policy is (maintaining) an open economy, we are not going to do any pegging, we are not going to control our capital flows. If any investor wants to take their money out, just take it."
He said investors will return once US markets settle down and the interest rate outlook is clearer. "We need time, the market will come back, and the currency will strengthen again," he said.