Capital market will continue to expand
Business Times - 01 Apr 2008
Despite global uncertainties, the Malaysian capital market will continue to enjoy growth this year given its resiliency, says the Securities Commission chairman THE Malaysian capital market, which saw robust growth last year, is expected to expand further this year despite a tougher global environment, the chief of the Securities Commission (SC) said. The market expanded by 24 per cent to RM1.6 trillion last year. "We don't know how global uncertainties are going to pan out, but our market has been resilient and so we do believe there will still be growth in 2008," chairman Datuk Zarinah Anwar told reporters yesterday after releasing the SC's 2007 annual report. Zarinah confirmed that she will remain as the SC chairman for a further two years from today as her contract has been extended. In the equity market, the SC has so far approved 13 initial public offerings (IPOs) in the first quarter with a total market size of RM35.6 billion, and seven others are being considered. The strong pipeline indicates that there could be more IPOs this year, she said. In the debt market, the SC has approved 25 local and foreign corporate bond issues valued at RM38.3 billion - fewer than the 36 issues approved in the same period last year but more than double the size. This bodes well for Malaysia to further improve its position as the third largest bond market in Asia today, and the largest in the world for sukuk issuance. Zarinah said the SC has awarded one of the world's largest fund managers, Franklin Templeton Investments, which manages some US$644 billion (RM2.05 trillion) of assets, a licence to operate in Malaysia. The US fund manager is the fifth foreign party to be given a fund management licence after Credit Agricole, Aberdeen Asset Management, BNP Paribas Asset Management and Nomura Asset Management. The SC is also in talks with several fund managers from the US, Europe and the Middle East who are keen to obtain a licence to do Islamic fund management here. "We welcome global fund managers to set up business in the Islamic fund management market. There will be no restrictions for them," she said. Zarinah described 2007 as "a very good year" for the capital market, with growth seen across all segments. The equity market grew by 30 per cent to RM1.1 trillion, while the bond market grew by 12 per cent to RM475 billion. The Islamic component of the capital market expanded by 29 per cent to RM895 billion. The fund management industry, which expanded by 44 per cent to RM237 billion, was the highest growth segment last year. The SC approved a record RM172 billion of fund-raising proposals last year, which is double that of 2006. The number of approved proposals rose to 368 from 292. The SC undertook 16 criminal prosecutions last year and took civil actions against 11 persons