Malaysia’s equity market raised RM4.1 bil fresh capital in 2022

KUALA LUMPUR (March 29): Stronger economic activities, positive investor sentiment and an orderly political transition following the 15th general election lent support to the local equities market in the fourth quarter of 2022, which managed to raise new capital of RM4.1 billion between January 2022 and January 2023, despite heightened volatility in the global financial markets.

This is 28% more than the RM3.2 billion raised in the January 2021-January 2022 period, and more than double the RM2 billion total from January 2020-January 2021, reflecting improvements in business confidence and investor demand, Bank Negara Malaysia said in its Economic and Monetary Review and Financial Stability Review 2022 report published on Wednesday (March 29).

And after recording four consecutive years of non-resident net outflows from the domestic equity market since 2018, non-residents turned net buyers for 2022 as a whole, with a net inflow of RM4.4 billion — despite non-resident equity flows turning negative from September amid subdued investor sentiment following continued inflationary pressures and expectations of faster monetary policy tightening by major central banks.

As for retail investors, while they remained a key player in the market last year, their level of participation declined from the highs seen during the pandemic due to higher returns on deposits and sharp price corrections in the technology and healthcare sectors.

Year-to-date average retail investors participation stood at 27.3%, compared to 2020-2021’s average of 34.3%.

“These investments have not, so far, been associated with an increase in leverage, shielding households from debt-related stress due to volatile equity prices.

“Household loans to purchase quoted shares remained small and stable at 0.5% of total banking system loans, unchanged from the five-year average share of banking system loans,” the central bank said.