Page 24 - SC SCAR 2023 ENGLISH Flipbook

PART 1 CAPITAL MARKET REVIEW AND OUTLOOK
MALAYSIAN CAPITAL MARKET DEVELOPMENTS IN 2023
The Malaysian economy continued to grow in 2023, albeit at a moderate pace, underpinned by resilient domestic private sector activities against the backdrop of challenging global trade. The labour market strengthened further, with the unemployment rate improving to a three-year low and supporting wage growth. By economic activity, the services sector continued to lead growth amid higher tourism activities and robust consumer spending. While headline inflation has moderated, core inflation remains high, reflecting continued underlying price pressures. For the full year of 2023, real gross domestic product (GDP) expanded 3.7%, on the back of sturdy domestic demand growth (Chart 3).
The Domestic Capital Market Continued to Support the Real Economy
The Malaysian capital market remained orderly, while continuing to serve its fundamental role in financing domestic economic activity and mobilising savings effectively. Malaysia’s financial stress broadly eased in
CHART 3
2023 and remained largely below its historical average despite concerns over stress in the US and European banking systems in March and rising conflicts in the Middle East in October. The performance of the capital market, however, was mixed, against a backdrop of continued economic uncertainty stemming from escalating geopolitical tensions, a weaker-than-expected economic recovery in China and the movement of the Malaysian ringgit against major currencies in the foreign exchange market.
The size of the capital market increased to RM3.8 trillion in 2023 (2022: RM3.6 trillion), driven by broad-based growth in both total Bursa Malaysia market capitalisation and bonds and sukuk outstanding. Similarly, the fund management industry expanded in 2023, with total assets under management (AUM) rising to a record high of RM975.5 billion (2022: RM906.5 billion), amid improvement in market value and greater asset allocation in developed markets (Chart 4). The unit trust segment1 remained the largest source of funds, comprising 51.3% of total AUM (2022: 53.9% of total).
However, total funds raised in the capital market moderated to RM127.7 billion in 2023, compared to a high of RM179.4 billion in 2022. In the equity market,
The Malaysian economy continued to grow in 2023 on the back of sustained resilience in domestic demand, amid challenging global trade conditions
10.0 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
4.5 4.0 3.5 3.0 2.5
2.0
1.5
1.0 0.5 0.0
Contribution to headline growth by demand components
Inflation and unemployment rate since 2022
2018
2019
2020
2021
2022
2023
Change in inventories Public expenditure Real GDP
Private expenditure Net exports
Unemployment rate (RHS) Inflation (LHS)
Source: Department of Statistics Malaysia, the SC’s calculations.
22
SECURITIES COMMISSION MALAYSIA ANNUAL REPORT 2023
1
Unit trust total net asset value (NAV) of RM500.5 billion in 2023 (2022: RM488.5 billion).
Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23
In percentage points (%)
Percentage (% y-o-y)
Percentage (%)