Source: MoF

KUALA LUMPUR, Oct 11 – The domestic equity market is expected to remain resilient in 2020 on account of strong macroeconomic fundamentals, ample domestic liquidity and well-developed capital market instruments.

 According to the Economic Outlook report released by the Ministry of Finance today, during the first seven months of 2019, gross funds raised in the capital market increased 27.8 per cent to RM167.9 billion mainly due to higher fundraising activity in the private sector, which grew significantly by 47 per cent to RM89.2 billion.

The report said gross funds raised by the private sector through the domestic equity market edged up drastically from RM0.9 billion to RM5 billion, with initial public offerings (IPOs) rising from RM0.6 billion to RM1.6 billion while rights issuances increased from RM0.3 billion to RM3.5 billion.

“This was driven by Malaysia's position as an attractive investment destination among local and foreign investors,” said the report.

It said as at end-July 2019, foreign holdings of Malaysian Government Securities (MGS) and Malaysian Government Investment Issues (MGII) stood at 38.3 per cent and 4.4 per cent respectively.

The improved foreign investors’ appetite for local bonds was spurred by the hunt for yield amid dovish sentiment.

However, yields of MGS and corporate bonds have declined across the entire maturity spectrum and rating bands in line with global bonds.

The downward trend was caused by stronger foreign investors’ appetite for Malaysian fixed-income securities.

Separately, the report said the FTSE Bursa Malaysia (FBM KLCI), which was on an uptrend throughout June 2019, retreated at end-August, due to slower world growth forecast by the International Monetary Fund (IMF) and intensified US-China trade disputes.

As at end-August, market capitalisation decreased 9.4 per cent to RM1,690.3 billion, while total volume declined 5.2 per cent to 444.3 units.

 "Likewise, total market transacted value decreased by 20.5 per cent to RM361.2 billion,” it said.

“However, the market velocity sustained at 22.8 per cent while market volatility was at 21.9 per cent,” it said.

-- BERNAMA