Unit trust funds were the largest contributor to the capital markets’ growth in 2014, said the Securities Commission Malaysia in its annual report released today.

“The net asset value (NAV) of the unit trust industry grew to RM343 billion, the largest in  Southeast Asia. Growth was driven by the expansion of channels for managed investments,” said SC chairman Datuk Ranjit Ajit Singh at a media conference.

There was a slight increase of 0.07% to the NAV, from RM336 billion in 2013.

According to the SC’s press release, fund management remains the strongest and fastest growth segment in the capital markets, surpassing the RM600 billion milestone for the first time to reach RM630 billion last year. This represented an increase of 7.1% from RM588.4 billion in 2013.

Islamic assets under management (AUM), meanwhile, grew to RM111 billion from RM98 billion in 2013, reflecting the industry’s ability to develop under Malaysia’s facilitative Islamic capital market environment.

The Private Retirement Scheme (PRS) segment also saw healthy growth, with its AUM doubling to RM716.1 million.

Overall, Malaysian capital markets grew to RM2.76 trillion last year, or 2.6 times the size of the economy, and remained resilient amid global uncertainties.

According to the SC, the capital markets continued to be an important source of financing for the economy, with RM91.9 billion raised through initial public offerings and private debt securities.

"Capital raising exceeded RM90 billion for the third consecutive year, illustrating the capital markets’ deep capacity to meet Malaysia's real economy financing needs," Ranjit said.

Malaysia also affirmed its global leadership in the Islamic capital market, having grown at an average of 12% per annum over the last five years to RM1.59 trillion in 2014, accounting for 58% of the capital markets.

The capital markets are expected to continue recording positive growth this year despite the strengthening of the US dollar and the low crude palm oil (CPO) prices.

“Our view is to make sure the capital markets remain resilient against any externally driven volatility,” said Ranjit.

According to the SC’s annual report, fundraising activity in relation to several large Economic Transformation Programme-related projects are expected to be carried out this year and will contribute to the growth of the capital markets. Sectors such as infrastructure and oil and gas are likely to source for long-term financing through sukuk and corporate bonds.