Malaysia’s Islamic capital market sees 22.6% growth (By IFN)

Malaysia’s Islamic capital market sees 22.6% growth

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MALAYSIA: The Securities Commission of Malaysia’s (SCM) latest annual report for the year ended the 31st December 2012 shows that the total size of the Malaysian Islamic capital market has reached RM1.4 trillion (US$449.3 billion), exhibiting a growth of 22.6%. The increase was attributed to the large amount of funds raised through the issuance of corporate bonds and IPOs in 2012; ranking Malaysia as the world’s biggest Sukuk market and fifth largest IPO destination globally. IPO issuances totaled to RM22.1 billion (US$7.09 billion), increasing equity market capitalization by 14.1% to RM1.5 trillion (US$481.42 billion), while Shariah compliant assets under management (AUM) hit RM79.6 billion (US$25.54 billion), making up 16% of the total industry AUM. According to the report, Malaysia also captured the lion’s share of global Sukuk issuances at 76.9% and 69.2% of global Sukuk outstanding. The number of foreign Sukuk issuers had also increased in the last year, with greater participation from Bahrain, Kazakhstan, Singapore and the UAE. The Malaysian regulator also expects heightened investor participation in the Malaysian Sukuk and conventional bond market, with the introduction of a framework allowing investors direct access to retail bonds and Sukuk. Under the framework, issuers are now able to issue bonds and retail Sukuk via the Kuala Lumpur Stock Exchange or over-the-counter via appointed banks; creating a more diversified investor pool for the issuers to tap. In line with the initiative, the SCM also enhanced its investor protection framework to ensure that investors are “treated fairly” and disclosures are made more transparent.