Page 96 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

OUTLOOK FOR 2019
GrOWtH OF tHE MaLaYSIaN CaPItaL MarKEt
IN tHE LaSt 25 YEarS: Global economic expansion is expected to continue
MOBILISING FINaNCIaL rESOUrCES FOr in 2019, although at a more moderate pace.
Major economies are on track for a synchronised
ECONOMIC DEVELOPMENt (Continued)
deceleration in growth. Although the US economy
is anticipated to grow further on the back of robust
Over the past 25 years, the SC has invested consumer spending, the momentum is expected to
and put in place efforts to create a facilitative
ecosystem for the capital market to develop and gradually moderate amid diminishing impact from
provide productive and efficient financing of the the fiscal stimulus. In Europe, economic growth
economy. Among others, a holistic Digital Markets is projected to moderate as economic activities
Strategy was rolled out in 2016 to facilitate will continue to be weighed down by political
innovative market-based solutions and develop a uncertainties. Growth in China is poised to slow
conducive digital finance ecosystem. In particular,
to ensure that the capital market continues to further as policymakers continue to aim for a more
provide financing for the needs of not only larger balanced and sustainable growth path for the
businesses but also smaller firms, alternative economy. Against the backdrop of moderating
market-based financing avenues such as equity global demand, major commodity prices are
crowdfunding and peer-to-peer financing were
introduced. This is an area in which the benefits expected to remain subdued and continue to be
of utilising newer technology can clearly be seen volatile, driven by supply-related developments
by lowering the costs of obtaining capital and alongside policy and geopolitical-related risks.
enhancing transparency for smaller firms, making
them more accessible and attractive to potential Given its significant interconnectedness to the
investors.
global economy, the ASEAN region is not immune
Going forward, as Malaysia continues to undergo to a weaker global environment and greater
structural reforms in its transition to a high-income downside risks to global growth. Nevertheless,
economy, it will continue to challenge the SC in the region is anticipated to remain a global
driving new initiatives that will help to facilitate growth centre, anchored by firm macroeconomic
the evolution of the capital market and enhance
access to financing of new growth areas necessary fundamentals as well as favourable demographic
for a more modern economy while ensuring that it profile and large infrastructure needs which will
remains sustainable and inclusive. continue to support domestic demand. Deeper
economic integration within the region will also
allow the ASEAN economies to secure the benefits
of higher productivity and efficiency to sustain
growth over the longer term.

Meanwhile, the prospect of rising trade
protectionism will remain a key downside risk
to not only the global economy, but also global
capital markets in 2019 and beyond, especially
in EMEs. Although the impact thus far remained
largely contained, a protracted period of US-China
trade dispute can significantly derail the growth
of the global economy. Over the short to medium
term, continued negative trade developments

86 | PART 4 »» CAPITAL MARKET REVIEW AND OUTLOOK

NEW_70-89.indd 86 2/21/19 9:29 AM