Page 95 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

The growth of the Malaysian capital market has not been just in terms of size, as witnessed by the robust and
comprehensive development in terms of infrastructure, institutions, regulations and products over the years. This progress
is clearly reflected in IMF’s index of financial development for Malaysia, which allows for consistent comparisons across
time and between countries. Based on IMF’s index, the development of the capital market can be assessed through three
key dimensions – depth, access and efficiency .
2
The IMF’s measurement shows that Malaysia’s overall financial sector development has improved significantly between
1993 and 2016 on the back of advancement in all three dimensions (Chart 13). Notably, in terms of international
comparison, Malaysia has achieved commendable performance overall and is ahead of emerging market peers and in
some aspects, advanced markets (Chart 13).

Chart 13
1
The development of the Malaysian capital market had contributed to improvement in the
2
country’s overall financial development (FD) index
Malaysia improved from 1993 to 2016, Generally, Malaysia performed better when
particularly in terms of the capital market access benchmarked against selected groups (2016)
1.0
1.0
0.9 0.9 Malaysia’s CM index
level, 2016
0.8 0.8
0.7 0.7
0.6 0.6

0.5 0.5
0.4 0.4
0.3 0.3
0.2 0.2
0.1 0.1
0.0 0.0
FD CM CM: CM: CM: Malaysia Advanced Asia and Emerging
Depth Access Efficiency markets Pacific markets

1993 2016 FD CM CM: Depth CM: Access CM: Efficiency
Notes:
1 IMF uses ‘Financial Market’, which comprises bond and equity markets, to designate the capital market (CM). For consistency purposes, Financial Market is
referred to as CM in this article.
2 The indices summarise how developed a CM is in terms of (a) depth (size and liquidity of markets), (b) access (ability of individuals to access financial services),
and (c) efficiency (provision of financial services at low cost and with sustainable revenues, and the level of activity of capital markets), all of which contribute
towards the overall level of a country’s FD.

Source: IMF Financial Development Index database, 2017

2 Rethinking Financial Deepening: Stability and Growth in Emerging Markets, IMF Discussion Note, May 2015.

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