The Malaysian capital market is poised to unfold another favourable story in 2013 as investors and issuers seize the opportunities provided by new initiatives in the marketplace.
Initial public offerings (IPOs) are also expected to remain vibrant after Malaysia became the fifth largest IPO destination globally last year.
"Given the strength we see in the capital market, it will provide a strong and favourable environment for both issuers to access the capital market as well as for investor participation," Securities Commission (SC) chairman Datuk Ranjit Ajit Singh told a media briefing held in conjunction with the release of SC's 2012 annual report and to mark its 20th anniversary, here, yesterday.
Last year was a record year with the capital market expanding by 16.4 per cent to an overall size of RM2.5 trillion.
All market segments saw double-digit growth ranging between 14.1 per cent and 22.6 per cent.
The large amount of funds raised through the issuance of corporate bonds and IPOs in 2012 sealed Malaysia's ranking as the world's biggest sukuk market, the world's fifth-largest IPO destination and fourth most active in Asia for corporate bond issuances.
The corporate bond and sukuk market exceeded the RM1 trillion mark for the first time and positioned the country as Asia's third largest bond market.
It was also a record IPO year with issuers raising a total of RM22.1 billion, which raised the equity market capitalisation by 14.1 per cent to RM1.5 trillion.
The bellwether FBM KLCI ended 2012 at a record high of 1,688.95 on December 31.
Ranjit also said a range of significant enforcement actions were taken in 2012, along with investigation efforts, to curb misconduct, market abuses and insider trading.
He said Malaysia is well-positioned when the Asean Economic Community takes effect in 2015 and when the capital markets are integrated.
Rules and regulations need to be harmonised and this includes requirements for disclosure, which will facilitate cross-border listings.
With integration, investors can look to a wide range of financial products, including mutual funds from Malaysia and other countries in the region, he added.
On the new asset class known as business trust, he said it will allow public-listed companies and banks to sell bonds to retail investors, among others.
Ranjit said the regulator has received several enquiries but the listing date has not been decided.
The business trust guidelines' release is part of its efforts to develop financing through the capital market and strengthen Malaysia's appeal as a regional listing destination.
Eugene Wong, who is SC's executive director for corporate finance and investments, identified yields as one of the important factors for business trusts.
On the plans to set up a mercantile exchange that will enable investors to trade in gold futures and other precious metals, Ranjit said a report will be presented to the government by the second quarter, following talks with the Ministry of Finance and other stakeholders.
As to allegation that information in the CDS accounts of investors had been leaked, Ranjit said Bursa Malaysia is conducting its investigations and preliminary findings have turned up negative.