This article first appeared in The Edge Financial Daily, on March 11, 2016.

KUALA LUMPUR: The Malaysian stock market capitalisation grew across all segments last year, with its size expanding 2.1% to RM2.82 trillion, or equivalent to 2.5 times of the country’s gross domestic product.

In releasing its Annual Report 2015 yesterday, the Securities Commission Malaysia (SC) said the equity market increased 2.6% to RM1.7 trillion from RM1.65 trillion a year ago.

The SC noted that the persistent weakness in oil throughout the year drove down the benchmark index by 3.9% to close at 1,692.51 points on the last day of trade. However, the FBM KLCI was still one of the top performers among other Asean peers, which were similarly affected.

The report revealed that technology-, industrial- and consumer-product sectors were the top performers, supported by strong demand on the back of a weaker ringgit.

“While heightened market volatility resulted in a cautious investing tone throughout the year, investors diverted interests into lower liners in the small cap and ACE Market counters, particularly those with high-growth potentials,” the SC said.

Consequently, the small cap and ACE Market indices ended the year higher by 6% and 13% respectively.

The SC also acknowledged that in line with a regional trend, Malaysia encountered fund outflow as foreign investors swapped to more conservative investing positions.

As at end-2015, foreign investors were net sellers as the Malaysian market registered cumulative outflow of approximately RM19.7 billion.

“Nonetheless, domestic institutional investors cushioned foreign equity outflows with net buying of RM21.4 billion, which allowed for orderly market adjustments against a volatile global environment,” the SC said.