Kuala Lumpur, 12 April 2011


CMP2 SEES SIGNIFICANT GROWTH PROSPECTS FOR MALAYSIA’S CAPITAL MARKET


The SC estimates the size of Malaysia’s capital market (comprising stockmarket capitalisation and debt securities) to more than double from RM2.0 trillion in 2010 to RM4.5 trillion by 2020.



Projections for Malaysia’s capital market to 2020



Source: SC



The baseline forecast is predicated on annual real GDP growth of 6.5% and historical market benchmarks, and is subject to prevailing economic and market conditions. The impetus from structural reforms and high impact investment projects launched under the New Economic Model (NEM) and Economic



Transformation Programme (ETP) will strengthen upside prospects. Based on benchmarks for regional financial centres, internationalisation could increase the potential size of Malaysian capital market by another 30% to RM5.8 trillion in 2020.



Several segments are expected to achieve critical mass such as the Islamic capital market which is projected to increase from RM1.1 trillion in 2010 to RM2.9 trillion in 2020 and the investment management industry where Assets under management (AUM) is projected to rise from RM377.4 billion in 2010 to RM1.6 trillion in 2020 and the penetration rate for unit trusts is expected to almost double from 18% in 2010 to 34% in 2020. There is also substantial upside from further expansion of the derivatives product range which will deepen liquidity due to higher levels of inter-market trading, hedging and arbitrage.



SECURITIES COMMISSION MALAYSIA