SC expects Malaysia’s capital market to raise RM110b-120b in 2019

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KUALA LUMPUR (March 14): Malaysia’s capital market is expected to see between RM110 billion and RM120 billion worth of funds raised in 2019, said the Securities Commission today, on anticipation that "IPOs will perform much better".

A total of RM114.6 billion was raised via the local capital market last year — which came in lower than the SC’s initial estimate of RM120 billion for that year. The 2018 capital raised was also at the five-year average level, which was around RM114 billion.

“This year, we are projecting a range of about RM110 to 120 billion,” said SC corporate finance and investment managing director Eugene Wong.

“The IPOs [initial public offering] will perform much better than last year,” Wong said after the release of the SC’s 2018 annual report here.

Last year’s figure of RM114.6 billion was 21.83% lower than the RM146.6 billion raised in 2017, which was deemed an exceptional year as those who deferred capital raising in 2015 and 2016 in anticipation of rate hikes did so in that year, according to news reports.

SC, in its 2018 annual report, also attributed the overall decline in fundraising in 2018 to “challenging global environment and ongoing domestic policy reforms”. Besides rising trade tensions, last year was when Bank Negara Malaysia normalised the Overnight Policy Rate by 25 basis points to 3.25% in January.

The corporate bond market saw a decline of 15.61% to RM105.4 billion, raised from RM124.9 billion in 2017. This leaves RM9.2 billion raised in the equity market last year, down 57.6% year-on-year from RM21.7 billion.

Of the RM9.2 billion, around RM0.7 billion was raised across 21 IPOs — a 90% drop from the RM7.2 billion worth of new listings in 2017 — while the rest came from secondary fundraising, such as private placements.

The 21 IPOs in 2018 comprised two Main Market listings and nine ACE Market listings, while the rest were LEAP Market entrants.