Malaysian capital market grew 5.6% to RM3.8T in 2023 – SC chairman

KUALA LUMPUR: Malaysia’s capital market grew by 5.6 per cent last year to RM3.8 trillion, largely driven by a vibrant bond market.

Securities Commission (SC) chairman Datuk Seri Dr Awang Adek Hussin said the fund management industry also contributed to the resilience of the local capital market, with total assets under management hitting a new high of RM975.5 billion.

“(This was) up sharply from RM906.5 billion in 2022 and even higher than the RM951.1 billion recorded in 2021,” he said in the SC Annual Report 2023 released today.

He said this shows that the Malaysian economy remained resilient in 2023, supporting economic activity and intermediating savings, despite global economic challenges and divergent monetary policies.

However, Awang Adek said that like most markets in the region, the country’s equities market did not perform as well in 2023 due to global headwinds.

“The FTSE Bursa Malaysia KLCI (FBM KLCI) declined by 2.73 per cent during the year. Nonetheless, positive developments in our stock market in the first two months of 2024 have been most encouraging,” he said .

On efforts to enhance the capital market last year, Awang Adek said the SC has signed a memorandum of understanding with SME Corporation Malaysia to help groom micro, small and medium enterprises towards the goal of listing.

To uphold the integrity of the market, the capital market regulator has been relentless in its pursuit of those who violate these laws in 2023, achieving successful outcomes in cases of insider trading, securities fraud and offences related to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

“For instance, in early 2024, we initiated criminal proceedings against individuals involved in alleged money laundering offences totalling RM183.5 million. Currently, we are dealing with 32 cases in various stages of legal proceedings.

“Through successful civil suits and regulatory settlements, we have identified RM4.5 million for restitution,” he said.

Awang Adek also noted that the SC established an internal task force to focus on scams and unlicensed activities last year.

“Through this initiative, we rolled out user-friendly tools,such as the Investor Alert page and ‘Scam Meter’, helping investors to stay informed and one step ahead of scammers.

“We also introduced the new ‘Investment Checker’ portal which provides a quick way for investors to verify the legitimacy of regulated activities,” he said.

Awang Adek said the commission is also establishing a dedicated unit to enhance its effectiveness in combating financial scams but investors must also exercise caution and take ownership of their investment decisions.

Meanwhile, he said SC continues to make its impact felt internationally.

“As a board member of the International Organisation of Securities Commissions (IOSCO) and incoming chair of the ASEAN Capital Markets Forum (ACMF) in 2025, we are not just strengthening our regulatory framework, but also showcasing our commitment to global best practices and leading the region in capital market development,” he added.

Awang Adek said the SC remains unwavering in its determination to strengthen the regulatory framework and uphold market integrity, not least because the commission continues to be measured against global regulatory standards.

“In fact, Malaysia will be subject to the Financial Action Task Force (FATF) evaluation exercise in 2025,” he said.

The SC will also continue to pursue engagements and collaborations, he said, adding that by fostering partnerships with industry stakeholders and regulatory bodies, both local and global, emerging challenges can be addressed collectively.

He said regular dialogues and knowledge sharing initiatives will also enable the commission to stay abreast of global best practices and adopt these into its regulatory framework accordingly.

Meanwhile, in the report, the SC said the Malaysian economy is projected to remain on a steady growth trajectory in 2024, backed by firm domestic demand, primarily through continued expansion in private sector spending.

“The Finance Ministry expects growth of the Malaysian economy to accelerate to 4.0-5.0 per cent in 2024 from 3.7 per cent in 2023. However, risks to growth remain tilted to the downside given ongoing external challenges,” it said.

The SC said in the domestic capital market activity will continue to be influenced by momentum in the domestic economy and corporate developments, with volatility likely to be driven primarily by uncertainties surrounding the global economy, particularly the direction of global monetary policy and evolving geopolitical tensions.

Nevertheless, it said favourable momentum in the latter part of 2023 is expected to continue into 2024, underpinned by ongoing supportive policy actions under the Ekonomi MADANI framework, which includes the New Industrial Master Plan 2030 and the National Energy Transition Roadmap.

“These national policies are expected to provide a tailwind in the short to medium term, amid greater policy clarity and a continued commitment by the government towards improving medium-term economic growth prospects,” it added.

The SC said market expectations remain broadly positive, projecting the benchmark FBM KLCI to end 2024 at around 1,600 points.

Meanwhile, it said the domestic capital market is expected to remain orderly and will continue to play an integral role in supporting the economy, underpinned by firm macroeconomic fundamentals, ample domestic liquidity and a facilitative capital market framework. – BK