Malaysian Capital Market Hits Record High of RM4.2 Trillion in 2024

The Malaysian capital market reached an all-time high of RM4.2 trillion in 2024 (2023: RM3.8 trillion), driven by growth in stock market capitalisation and outstanding bonds and sukuk. The fund management industry’s assets under management (AUM) also soared to RM1.1 trillion (2023: RM975.5 billion), surpassing the RM1 trillion milestone.

This growth was largely supported by strong global equity market performance, as noted by the Securities Commission Malaysia (SC) in its Annual Report 2024.

Fund-raising activities in 2024 surged to RM138.9 billion (2023: RM127.7 billion), including a record-breaking 55 Initial Public Offerings (IPOs) (2023: 32 IPOs), which collectively raised RM7.42 billion (2023: RM3.6 billion).

The SC Chairman, Dato’ Mohammad Faiz Azmi, highlighted that the sustained growth, bolstered by strong bond and sukuk issuances, demonstrated the resilience of Malaysia’s capital market, ensuring it continues to facilitate capital formation and economic support.

Looking forward, the SC is drafting a new five-year capital market masterplan, focusing on key areas such as enhancing financial security for retirees and promoting sustainable financing. “Building on our market’s strengths, the SC remains committed to fostering an inclusive and vibrant capital market while facilitating innovation and enhancing regulatory efficiency,” said Faiz.

Market Growth and Fundraising

The total funds raised through the equity and corporate bond market grew by 8.7% to RM138.9 billion in 2024. A record 55 IPOs in 2024 raised RM7.4 billion, a significant increase from 32 IPOs in 2023. Bond and sukuk issuances amounted to RM124.2 billion, with sustainability-related issuances growing to RM13.3 billion (2023: RM8.7 billion).

The Islamic capital market expanded by 8.5% to RM2.6 trillion, supported by a 7.1% rise in sukuk outstanding and a 3.6% growth in the market capitalisation of Shariah-compliant equities.

Alternative financing for Micro, Small, and Medium Enterprises (MSMEs) also saw substantial growth, with RM4.1 billion raised through peer-to-peer (P2P) financing, equity crowdfunding (ECF), and venture capital/private equity (VC/PE). This includes RM1.5 billion from VC/PE, RM97.6 million from ECF, and RM2.5 billion from P2P financing, reflecting a rising interest in supporting small businesses.

Investor Interest and Trading Growth

Investor sentiment remained strong in 2024, with the average daily trading value rising to RM3.44 billion from RM2.29 billion in 2023. The fund management industry saw AUM surpass RM1 trillion, driven by the strong performance of global equity markets. The Private Retirement Scheme (PRS) recorded an 18% year-on-year growth, reaching a net asset value of RM7.61 billion.

Additionally, Digital Investment Management (DIM) AUM grew to RM1.9 billion, marking an over 500-fold increase since its inception in 2018. The average daily trading value of Digital Asset Exchanges (DAX) also increased by 2.6 times in 2024, indicating growing interest in digital assets.

Key Market Development Initiatives

Several significant initiatives were launched in 2024, including the Single Family Office (SFO) Incentive Scheme in Forest City to position Malaysia as a premier wealth management hub. The National Sustainability Reporting Framework (NSRF) was introduced to align corporate sustainability disclosures with global standards.

Additionally, a five-year roadmap (2024-2028) was rolled out to enhance MSME and Mid-Tier Company (MTC) access to capital markets.

To improve efficiency, the SC shortened the IPO approval process by introducing the Focus Scope Assessment framework, reducing the time-to-market from over six months to just three months. Meanwhile, the Regulatory Sandbox allowed for greater innovation by providing a controlled environment for experimenting with new financial products and services.

Regulatory actions in 2024 included one criminal conviction, RM9.87 million in civil penalties, and 125 administrative sanctions, resulting in fines and penalties amounting to RM13.72 million. Efforts to combat scams and unlicensed activities saw the SC receive 4,859 complaints and inquiries, a 49% increase from 2023.

Additionally, 796 suspicious URLs (2023: 569) were identified through proactive surveillance, leading to 273 entities being added to the Alert List, 153 website blockages, and 261 social media takedowns.

Audit Oversight Board (AOB) Initiatives

In 2024, the AOB continued its efforts to strengthen audit oversight, with 42 audit firms and 393 individual auditors registered and recognised. Inspections were conducted on 40 audit engagements audited by 40 individual auditors from 13 audit firms to ensure compliance with auditing and ethical standards.

Three enforcement actions were taken against two audit firms and four individual partners, resulting in reprimands, prohibitions, and RM275,000 in monetary penalties.

The AOB also subsidised 100 accountants from registered firms for the GRI Professional Certification Programme conducted by SIDC in October 2024, demonstrating its commitment to enhancing professional standards in financial reporting and sustainability assurance.

Capital Market Stability Amid Global Uncertainties

Despite global headwinds, including interest rate adjustments by major central banks, foreign exchange fluctuations, and geopolitical risks, the Malaysian capital market remained resilient and orderly, with no systemic stability concerns.

Market intermediaries, such as brokers and fund managers, maintained robust risk management practices, ensuring adequate capital buffers. A thematic review emphasised the importance of cybersecurity resilience, urging capital market entities to strengthen their defences against evolving cyber threats.

Moving Forward in 2025

In 2025, the SC aims to further strengthen market segments while reinforcing governance and financial sustainability. Key initiatives include ASEAN Capital Markets Forum (ACMF) projects, the development of Capital Market Masterplan 4 (CMP4), and enhancing Malaysia’s leadership in Islamic finance.

The SC will also undergo two key assessments: the Financial Action Task Force (FATF) Mutual Evaluation and the biennial Corporate Governance (CG) Watch for the Asia Pacific region.

Additionally, the SC is reviewing regulatory fees to support market growth, with extensive stakeholder consultations expected to conclude in 2025.

Special Features in the SC Annual Report 2024

The SC Annual Report 2024 includes four special feature articles: “Issues and Challenges of Ageing to Capital Market,” “Malaysian Co-Investment Fund (MyCIF) Spurring Growth and Enhancing Competitiveness of MSMEs,” “SCxSC Expansion: Driving Innovation for a Sustainable Capital Market,” and “National Sustainability Reporting Framework.”

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