PETALING JAYA: Despite the challenging environment, Bursa Malaysia’s Main Market saw 20% growth in the number of new listings in 2020, and there is a healthy pipeline of 30 initial public offerings (IPOs) for this year, Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Albar said.
He noted that the disruption from the Covid-19 pandemic has affected fundraising activities, as significant uncertainties remain.
“However, the capital market continues to be a key source of financing as IPOs are still seen as a good way for companies to raise funds to expand their business and improve their corporate standing,” Syed Zaid told the media at a virtual launch of the SC’s 2020 Annual Report on Thursday.
He is optimistic that Malaysia and the global economy will be on the path to recovery this year, due to progress in the vaccination programme, continued policy support and overall resumption in economic activities.
“Nevertheless significant uncertainties still remain and overall recovery is expected to be gradual and uneven across all sectors. Against this backdrop, the SC will provide policy support ensuring that the market remains resilient and orderly, and remain a key funding source to revitalise the growth of the Malaysian economy in 2021,” he said.
When asked whether the regulator might relax the regulations surrounding special purpose acquisition companies (SPACs) which have gained momentum in other markets, Syed Zaid said it will assess whether such development will be relevant or beneficial to the Malaysian market.
“Investors are obviously looking at alternative revenue for higher returns and the emergence of tech-based business models triggered by the pandemic. Currently, we are definitely keeping a close watch on the trends, especially if they are relevant to our home market.”
The regulator’s market and corporate supervision executive director, Kamarudin Hashim, pointed out there is continuing development in the bond and sukuk market.
“Based on industry feedback, issuance of corporate bonds and sukuk for 2021 is expected to be RM100-110 billion. We see continued economic recovery will lead to an increased private investment as business confidence grows,” he said.
Apart from that, Kamarudin anticipated a growth of quasi-government corporate bonds amid the large infrastructure projects in the pipeline.
He said the present conducive financing landscape might persuade issuers to increase their issuance given the much lower financing cost.
According to the SC’s annual report Malaysia’s capital market saw a 7% growth in 2020 to RM3.4 trillion compared with RM3.2 trillion in the previous year despite the challenging operating environment.
Meanwhile, the Malaysian fund management industry’s assets under management (AUM) rose to RM905.5 billion in December 2020, an increase of 10% or RM82.3 billion.
The report pointed out that the unit trust segment remained the largest source of funds for AUM, with a higher total net asset value amounting to RM519.5 billion in December last year compared with RM482.1 billion recorded for the same month of the preceding year.
The regulator said it received 80 applications relating to takeovers, mergers and acquisitions last year compared with 81 applications received in 2019.
It cleared 25 applications involving a total offer value of RM3.49 billion or an average of RM139.57 million per offer, a 28.8% decline from RM4.9 billion in 2019 (22 offers with an average of RM222.5 million per offer).
As for the progress in the joint regulatory subsidiary between the SC and Bursa Malaysia that was announced last year, it said all the operational frameworks are already in place. Once the regulation has been finalised and gazetted, the subsidiary should be ready for implementation in the second half of this year.
