KUALA LUMPUR (March 20): Total funds raised in the capital market grew to RM138.9 billion in 2024, up 8.8% from RM127.7 billion in 2023, driven by a surge in initial public offerings (IPOs), robust bond issuances, and renewed investor confidence, according to the Securities Commission Malaysia (SC).

Equity fundraising rose to RM14.7 billion, with RM7.4 billion raised from 55 IPOs — up from 32 listings in 2023 — while secondary fundraising accounted for RM7.3 billion.

Meanwhile, the bond and sukuk market remained a key driver of capital formation, contributing RM124.2 billion to total funds raised.

"The Malaysian capital market outperformed most of its regional peers despite recording net foreign equity outflows, supported by strong buying interest from several local institutional investors, stable political and macroeconomic conditions, and the recovery of the Malaysian ringgit against major currencies," the SC said in its Annual Report 2024 released on Thursday.

In line with the government’s push for sustainable finance, the issuance of sustainability-related instruments increased to RM13.3 billion in 2024, compared with RM8.7 billion in the previous year.

Alternative fundraising platforms also saw continued growth, with equity crowdfunding and peer-to-peer financing raising RM2.6 billion in 2024, up from RM2.2 billion in 2023.

The SC highlighted that these platforms play a crucial role in enhancing financial inclusivity, particularly for micro, small, and medium enterprises.

Malaysia’s stock market ended 2024 on a strong note, with the local bourse’s total market capitalisation rising to RM2.1 trillion from RM1.8 trillion in 2023. The benchmark FBM KLCI surged 12.9% to close at 1,642.33 points — reversing a decline of 2.73% in 2023 — outperforming the MSCI Asia Pacific and MSCI Asean indices.

Despite net foreign equity outflows growing 83.2% to US$941.9 million (RM4.17 billion) in 2024, from US$514.2 million in 2023, local institutional investors stepped in, accumulating RM9.99 billion worth of equities — three times more than in 2023.

"The performance of the Malaysian equity market was largely driven by a series of domestic factors including further clarity in national policy rollouts (e.g. NIMP 2030, NETR, NSS), fiscal consolidation measures (e.g. diesel subsidy rationalisation), favourable earnings growth and corporate activities.

"This was further supported by Malaysia’s position in the global semiconductor value chain and numerous analysts’ upgrades on their FBM KLCI targets," the SC noted.

Interestingly, the SC observed a positive shift in sentiment favouring medium and small-sized companies, as reflected by the favourable performances of FBM Mid 70 and FBM Small Cap.

"In 2024, a total of 38 stocks recorded an annual return of more than 100%. These stocks were mostly from the FBM Small Cap and the FBM ACE Index, and majority are from the industrials and information technology sectors. This suggests that the market provides good investment opportunities and favourable returns especially to those with sound market understanding," it explained.

Malaysia’s bond market also expanded, with total bonds and sukuk outstanding growing to RM2.1 trillion from RM2.01 trillion in 2023. Government bonds remained a key driver, although net foreign inflows moderated to RM4.78 billion, compared with RM23.65 billion in 2023.

Looking ahead, the SC expects Malaysia’s capital market to remain on a steady growth trajectory, supported by domestic demand, private sector investment, and ongoing government economic initiatives.

“However, risks to growth remain tilted to the downside given current external challenges,” the SC warned.

"Nevertheless, continued supportive policy actions under the Ekonomi Madani framework and the implementation of National Economic Plans are expected to provide a tailwind in the medium term. This signals continued commitment by the government towards improving medium-term economic growth prospects," it added.

For more SC 2024 Annual Report stories, click here.