Capital markets to continue supporting economy – SC

KUALA LUMPUR: The domestic capital market is expected to remain orderly and continue playing an integral role in supporting the economy in 2024, underpinned by firm macroeconomic fundamentals, ample domestic liquidity and a facilitative capital market framework, says the Securities Commission.

In its annual report 2023, the market regulator said the capital market will continue to be influenced by momentum in the domestic economy and corporate developments.

On the other hand, volatility was likely to be mainly driven by uncertainties in the global economy, particularly the direction of global monetary policy and evolving geopolitical tensions.

Over the past year, the Malaysian capital market continued to serve its fundamental role in financing domestic economic activity and mobilising savings effectively.

“Malaysia’s financial stress broadly eased in 2023 and remained largely below its historical average despite concerns over stress in the US and European banking systems in March and rising conflicts in the Middle East in October.

“The performance of the capital market, however, was mixed, against a backdrop of continued economic uncertainty stemming from escalating geopolitical tensions, a weaker-than-expected economic recovery in China and the movement of the Malaysian ringgit against major currencies in the foreign exchange market,” it said.

Nevertheless, the capital market remained resilient in 2023, growing 5.6% in size to RM3.8 trillion from RM3.6 trillion in 2022, due to the growth in total equity market capitalisation and bonds and sukuk outstanding.

The SC said the fund management industry also grew strongly with total assets under management (AUM) hitting a new high of RM975.5mil from RM906.5mil in 2022, due largely to positive valuation effect.

SC chairman Datuk Seri Awang Adek Hussin said the strong capital market performance was achieved despite global economic challenges and diverging expectations of monetary policies in major economies.

“The SC remains unwavering in our resolve to strengthen our regulatory framework and uphold market integrity, not least because we continue to be measured against global regulatory standards,” he said.