Fund raising activity in the capital market expanded significantly from January to July 2017, following stronger-than-expected issuances, with gross funds raised soaring 21.4 per cent to RM134.6 billion from RM110.9 billion in the same period last year.
The Ministry of Finance (MoF) said the overall gross funds raised in the capital market by both private and public sector amounted to RM67.2 billion and RM67.4 billion, respectively, compared with RM53.2 billion and RM57.7 billion previously.
"The gross funds raised by the public sector increased 16.9 per cent, with the issuance of Malaysian Government Securities (MGS) rising 14.3 per cent to RM35.3 billion in the January-July 2017 period from RM30.9 billion in the corresponding period last year," it said.
The MoF said the gross funds raised by the private sector through new corporate bond issuances were higher by 26.3 per cent from an increase of 20.8 per cent in the same period last year.
"The bulk of new issuances were medium-term notes which accounted for 94.4 per cent of the total corporate bonds, while the finance, insurance, real estate and business sectors continued to account for the bulk of the funds raised at RM35.4 billion or 62.1 per cent of the total corporate bonds issuances.
"The funds were mainly used to finance infrastructure projects, for working capital and general business activities," the MoF said this its Economic Report 2017/18 released in conjunction with the 2018 Budget announced by Prime Minister Datuk Seri Najib Tun Razak here today.
On the equity market, the ministry said as of end-August, the FTSE Bursa Malaysia KLCI gained eight per cent year-to-date or 131.4 points to close at 1,773.16 points, compared with a fall of 14.5 points (-0.9 per cent) to 1,678.06 points as of end-August 2016.
"This was in line with other regional bourses due to improving sentiment following the United States pro-growth policies and China's strong economic performance," it said.
The MoF said in January-August 2017 period, total market transactions on Bursa Malaysia surged 40.4 per cent to 427.6 billion units from 304.5 billion units in the same period last year.
"Total market transacted value rose 25.1 per cent to RM406.3 billion from RM324.7 billion previously.
"Average daily trading volume and value increased to 2.6 billion units and RM2.5 billion, respectively, as compared with 1.9 billion units and RM2.0 billion in the first eight months of last year," it said.
On the Islamic capital market, it said as of end-July 2017, a total of 678 Shariah-compliant securities were listed on Bursa Malaysia, representing 75.1 per cent of the number of total listed securities.
"The Shariah market capitalisation makes up 60.7 per cent of the total market capitalisation of RM1.8 trillion against RM1.7 trillion in the first seven months of last year," it said.
On sukuk, the ministry said total issuances in the domestic market accounted for RM83.9 billion or 50.7 per cent of the total bond issuances from January to July 2017, with outstanding sukuk at RM719.5 billion, accounting for 57.1 per cent of the total bonds outstanding as of end-July 2017.
"On global position, total new sukuk issuances in the first seven months of the year increased 47 per cent to US$66.8 billion versus an increase of 1.1 per cent to US$45.4 billion in the same period last year.
"Malaysia held 26.4 per cent, or US$17.7 billion, of the market share for new sukuk issuances from January-July 2017 compared with 47.3 per cent or US$21.5 billion previously," it said.
The MoF added that Malaysia continued to maintain its leading position for sukuk outstanding constituting 50.1 per cent or US$192.2 billion as of July 2017, up from US$182.7 billion in the same period last year.
*This news was sourced Bernama~