SC & BNM establish digitisation acceleration working group
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SC & BNM establish digitisation acceleration working group 15 March 2018Kuala Lumpur Reporter: Jenna Lomax
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The Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) have established the Brokerage Industry Digitisation Group (BRIDGe).
BRIDGe aims to accelerate the digitisation of the brokerage industry to enhance operational efficiencies and service standards.
The working group will encompass the SC, BNM, and industry participants including brokers and banking institutions.
The announcement was made at the launch of the SC Annual Report for 2017.
According to SC, the Malaysian capital market grew 12.6 percent to RM3.2 trillion ($820 billion) in 2017 and total capital raised amounted to RM146.6 billion ($37.44 billion).
The capital markets saw the growth across all segments due to “better economic fundamentals, corporate earnings recovery, growth in private investments, strong foreign investment inflows and higher investor participation”.
According to the annual report, equity market capitalisation expanded 14.4 percent to RM 1.9 trillion ($490 billion), with positive performance across all key indices.
Total bonds and sukuk outstanding stood at RM 1.3 trillion ($330 billion), an increase of 10.1 percent.
Sukuk bonds are bonds that are structured to generate investor returns without infringing Islamic law which prohibits the charging or paying of interest.
Fundraising was backed by a strong upward momentum in private investments, which underscores the capital market’s depth and continuous ability to provide a facilitative and effective avenue for capital raising, according to the report.
Corporate bond and sukuk issuance of RM 124.9 billion ($31.9 billion) exceeded the RM 100 billion ($25.54 billion) mark for the first time since 2012.
Fundraising through the equity market was also higher in 2017 at RM 21.7 (5.54 billion) billion compared to RM 12.8 ($3.27 billion) in 2016.
The fund management industry grew 11.5 percent to RM 776.2 billion ($198.23 billion), reflecting stronger investor interest in the capital market.
This growth was driven by an expansion of the unit trust industry, which saw net sales of RM 45.2 billion ($11.54 billion) in 2017, up from RM 26 billion ($6.64 billion) of net sales in 2016.
Looking ahead, the SC said it will focus on a series of objectives.
These include pursuing measures to enhance the vibrancy of the equity market, liberalising requirements for retail participation in the bond and sukuk market, accelerating development of a Shariah-compliant SRI ecosystem, as well as introducing enhancements to the initial public offering framework to promote efficiencies in equity fundraising.
Tan Sri Ranjit Ajit Singh, SC chairman, said: “The capital market has recorded strong growth across all segments and continues to play a major role in capital formation and the financing of the Malaysian economy, while at the same time offering a wide range of opportunities for investors as reflected by a high level of participation.”
He added: “We will continue to ensure a facilitative ecosystem and regulatory architecture to promote trust and confidence in the market.”
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