SC expects firms to raise up RM105b capital in 2017

Of the estimated RM80bil, RM75bil is expected to be from bonds, and RM5bil from initial public offerings (IPO) , said SC chairman Datuk Seri Ranjit Ajit Singh.(pic)

KUALA LUMPUR: The Securities Commission (SC) expects companies to raise between RM90 billion and RM105 billion in capital this year, with a bulk of it from bonds and sukuk.

Chairman Tan Sri Ranjit Ajit Singh said that of the amount, about RM85 billion would be raised through bonds and sukuk, RM7 billion each from initial public offerings (IPOs) and equities respectively, and the rest from the secondary market.

Speaking at the International Fund Forum 2017 in Kuala Lumpur on Thursday, he said the capital raised in 2016 was close to RM100 billion, of which RM87 billion came from corporate bond issuances and IPOs, with the rest secured through secondary fund raising.

"From the total figure (in 2017), a very strong dimension is the sukuk market and we anticipate a further improvement in the capital raising.

"The driver (to the fund raising this year) will be the business need and infrastructure financing, among others," he added.

Also present at the forum was Second Finance Minister Datuk Johari Abdul Ghani, Bank Negara governor Datuk Muhammad Ibrahim, international fund managers, chief executive officers, and captains of the finance industry.

Ranjit said despite external volatility that had affected all emerging markets, the capital market in Malaysia was very resilient and able to finance the economy and businesses.

"The good thing about Malaysia is the consistent growth in the capital market and we anticipate this to continue," he added.

Elaborating, he said there is a sense of cautious optimism over this year, particularly the latter part, which should provide more positive prospects for emerging markets on the back of improving economic growth, more stable commodity prices and hopefully greater certainty in the direction and policy momentum of larger economies.

He said the emerging markets as a consequence should see healthier portfolio inflows as they are reasonably well-positioned to benefit from improving growth prospects and stronger domestic demand drivers.

"As for Malaysia, there are sound economic fundamentals in place to support a consistent growth outlook.

"Together with Malaysia's strong financial and capital market systems and robust regulatory environment, global investors should make a differentiation within emerging markets and continue to invest in our long-term value and growth potential," he added.

Ranjit said Malaysia's investment management industry had expanded rapidly over the past five years, where the total pool of assets under management by 74 SC-licensed firms stood at RM702 billion as of November 2016. - Bernama