The number of Shariah compliant securities listed on Bursa Malaysia increased from 789 to 811 as of end-2023 — marking a new high of 81.51% of the 995 in total. These Islamic instruments accounted for 63.73% of the overall capital market. FRANCIS NANTHA reports.
The Islamic capital market overall chalked steady growth, expanded by 4.5% to RM2.43 trillion (US$514.92 billion) from RM2.32 trillion (US$491.61 billion) in 2022, the Securities Commission Malaysia (SC) said in its Annual Report 2023. Total market capitalization for Islamic securities stood at RM1.16 trillion (US$245.8 billion) while outstanding Sukuk totaled RM1.27 trillion (US$269.11 billion).
The SC said Sukuk represented 77.25% (2022: 81.66%) of total corporate bonds and Sukuk issuances, with 15 being SRI Sukuk in 2023, bringing the total of SRI Sukuk issuers to 34 since 2015.
Islamic fund management assets under management (AuM) stood at RM226.14 billion (US$47.8 billion), up 9.85% from RM205.86 billion (US$43.52 billion) as of end-2022. There were 59 fund management companies overseeing Islamic funds — 24 fully Islamic and 35 conventional fund management companies with Islamic windows.
Total Islamic collective investment schemes — unit trust funds, wholesale funds, private retirement schemes, REITs and exchange-traded funds — stood at 415 as of December 2023.
Committed funds for private equity stood at RM11 billion (US$2.33 billion), up from RM10.71 billion (US$2.26 billion), and RM6.58 billion (US$1.39 billion) for venture capital, which increased from RM5.37 billion (US$1.14 billion) the year before.
Private equity commitments are sourced from corporate investors (32.36%), individuals and family offices (19.45%), and financial institutions (12.88%). Government agencies and investment companies (38.62%), sovereign wealth funds (22.55%) and corporate investors (19.73%) provided venture capital funding.
For equity crowdfunding, the SC said the 2023 total decreased to RM126.28 million (US$26.69 million) from RM140.89 million (US$29.78 million) as the number of successful campaigns was down to 51 (2022: 68 campaigns) — with the highest amount raised by a single fundraising campaign in 2023 of RM20 million (US$4.23 million).
P2P financing raised a 32% higher total of RM2.09 billion (US$441.81 million) against RM1.58 billion (RM334 million), with 31,002 campaigns (2022: 24,455 campaigns). Of these, 67% of campaigns raised RM50,000 (US$10,569.5) and below.
Total AuM of licensed fund management companies in Malaysia rose 7.61% to RM975.48 billion (US$206.21 billion) from RM906.46 billion (US$191.62 billion). Sources of funds under management were unit trust funds (2023: RM499.88 billion (US$105.67 billion); 2022:RM487.94 billion (US$103.15 billion)), the Employees Provident Fund (2023: RM186.92 billion (US$39.51 billion); 2022:RM157.83 billion (US$33.36 billion)), corporate bodies (2023: RM107.83 billion (US$22.79 billion); 2022: RM97.76 billion (US$20.67 billion)) and the rest from wholesale funds.
The bulk of the investments was allocated in equities (2023: 48.65%; 2022: 47.59%).
Despite such robust figures, the SC recorded a higher after-tax deficit of RM71.3 million (US$15.07 million) against RM25.3 million (US$5.35 million) in 2022. SC Chairman Awang Adek Hussin said this deficit is being addressed, with measures including charging more for investment bank audits as the fee structure has not been revised in over 30 years.
