Capital market expands to RM3.19 trillion
Published on: Friday, June 21, 2019
KUALA LUMPUR: Initiatives of the Securities Commission of Malaysia (SC) resulted in the capital market expanding to RM3.19 trillion as at end April 2019, its Chairman Syed Zaid Albar (pic) said.
He said the capital formation was due to the ability of businesses to obtain long-dated financing through the equity, bond and sukuk markets.
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Malaysia has also become a global leader for the Islamic capital market, he said at the launch of “The Evolving Business of Asset Management” report by the Institute of Capital Market Research (ICMR) Malaysia and Nomura Institute of Capital Market Research here on Thursday.
However, Syed Zaid said, for Malaysia to defy structural challenges and do better, capital market development must become a shared prerogative between the SC and the private sector.
The report says while the asset management industry of Malaysia has grown rapidly in the last decade, there are signs of a slowdown amid fundamental shifts which are expected to alter the business landscape for asset managers in the future.
Over the last 20 years, the asset management industry has recorded strong growth with a compounded annual growth rate of 16 per cent, reports FMT.
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Syed Zaid said: “Data from the last five years suggest that it might have reached an inflection point with signs pointing to slowing future growth.”
Investors and industry players had also raised concerns about the growth trajectory due to industry shortcomings, he added.
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He said the report recognised that the industry must contend with structural shifts which were reshaping the very nature of asset management.
Such shifts include changing demographic trends and investor preferences, digitalisation, the availability of appropriately-skilled talent, as well as market structure and regulations.
“By bringing these issues and challenges to the fore, today’s report has helped to shine a light on areas that must be addressed as a matter of priority both by policymakers as well as the private sector,” he added.
SC, he assured, would review the recommendation provided in the report and effect the necessary improvements.
At the same time, he hoped the private sector would “proactively seek to enrich their respective strategies with insights contained in the report”.
Syed Zaid said Malaysia has “ample” liquidity as the country has strong macroeconomic fundamentals, backed by a resilient market.
This, he added, was also possible because we have stockbrokers and intermediaries that are well poised and our market is still resilient”.
“This is what we try to improve. As they (stockbrokers and intermediaries) improve their discipline, we will allow more liberties in the market,” said Syed Zaid.
“If there is any selling activity by foreign investors, our liquidity in the local market will buffer foreign outflows,” he said.
Asked on the on-going US-China trade tension, he said it will continue and no one knows when it will end, adding “there is an indication that it may not be ending soon”.
On the Malaysian market outlook, he said although there is a decline in corporate earnings, in terms of value, it is still a good investment place for foreign investors.
Meanwhile, ICMR Director Azleen Osman Rani said the asset management industry needed a revitalisation given the fast-changing economic and financial landscape.
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