Crypto Trading Fuels Digital Asset Growth, Trust Funds Remain as Largest CIS Component
In the Securities Commission Malaysia (SC) Annual Report 2024, it was revealed that the growth of Malaysia’s digital asset ecosystem signals local investors’ rising familiarity with the new asset classes, particularly in terms of crypto-asset trading activities.
The development, as SC pointed out, is also driven by the presence of regulated players in the market, in line with its digital agenda to create a more diversified and democratised capital market.
“In Malaysia, there has been a rebound of crypto-asset trading activities within the recognised market operators – digital asset exchange (RMO-DAX) space, expansion of ecosystem players, increase in digital asset-related products such as digital asset funds and initial exchange offering (IEO) token fundraising, as well as more interest in blockchain adoption and tokenization within the capital market,” it said.
The SC also highlighted that the average daily trading value of RMO-DAXs increased by 2.6 times in 2024 compared to the previous year.
Meanwhile, the SC noted that IEO operators issued their first token for fundraising last year, including a tokenised Shariah-compliant investment note and two utility token issuances with the total funds raised reaching RM48 million.
Apart from that, it also said that blockchain technology promises various characteristics such as programmability, transparency and accessibility, consequently driving global interest in the tokenisation of underlying securities.
Additionally, to further support the future of the Malaysian capital market, the SC is collaborating with Khazanah Nasional Bhd to explore the issuance of a tokenised bond of sukuk.
The collaboration, according to SC, would allow both parties to delve into the functions and utility of tokenisation, ranging from the use of smart contracts to custodial arrangements, consequently deepening understanding of the benefits and risks involved with blockchain technology.
Meanwhile, unit trust funds is still the largest component of Malaysia’s collective investment schemes (CIS) industry, with a total net asset value (NAV) of RM546.08 billion as of 31 December 2024 – higher than the RM499.88 billion in 2023.
“The percentage of the total NAV of the unit trust fund industry against Bursa Malaysia Securities Bhd’s market capitalisation was 26.25%. In 2024, a total of 33 unit trust funds were launched, while 12 funds were terminated and three funds matured, bringing the total number of unit trust funds offered by 39 locally incorporated unit trust management companies to 773 as of 31 December 2024,” the report stated.
The SC said the unit trust fund industry recorded total gross sales (excluding reinvestment of distribution) of RM283.54 billion, with unit trust management companies accounting for RM140.50 billion.
Overall, the industry saw net redemptions (excluding reinvestment of distribution) of RM8.59 in 2024, down from RM25.19 billion in 2023.
In the wholesale funds segment, the total NAV rose to RM82.60 billion as of 31 December 2024 from RM77.15 billion in 2023.
For private retirement schemes (PRS), the regulator said the number of schemes remained unchanged at 14, comprising 78 funds offered by nine PRS providers.
“The total NAV grew by 17.98% to RM7.61 billion as of 31 December 2024 with contributions from members remaining robust, as RM938 million was invested into PRS during the year,” it said, adding that the total number of PRS members rose 6.61% to 617,000 as of 31 December 2024.
