SC: Malaysia’s capital market tops regional peers as RM138.9 billion raised in 2024

Malaysia’s capital market delivered a robust performance in 2024, crossing RM138.9 billion in total funds raised and marking a clear 8.8% year-on-year gain from RM127.7 billion in 2023. The surge was propelled by a wave of initial public offerings (IPOs), steady bond and sukuk issuances, and a renewed sense of investor confidence that helped sustain market activity even as foreign investors retrenched from equities. The year also highlighted a broad-based expansion across fundraising channels, with sustainability-linked instruments expanding the financing toolkit and alternative platforms continuing to widen access to funding for smaller enterprises. Against this backdrop, the Securities Commission Malaysia (SC) underscored that the capital market, while facing certain external headwinds, remained resilient and increasingly diversified in its fundraising mix. The year’s results reflect not only a rebound in traditional equity and debt markets but also a strategic shift toward sustainable finance and inclusive financing channels that align with broader government policy ambitions and macroeconomic resilience.

Comprehensive view of 2024 fundraising momentum and composition

In 2024, equity fundraising contributed RM14.7 billion to the total capital market tally, a figure that illustrates both the rebound in equity markets and the continued appetite for new listings. Within this equity segment, IPO activity stood out distinctly, with RM7.4 billion raised from 55 IPOs, a substantial uptick from the 32 listings recorded in 2023. The increase in IPO activity signals a more favorable primary market environment driven by improved market sentiment, clearer policy directions, and a perceived opportunity to capitalize on rising valuations in a number of growth-oriented sectors. Secondary fundraising, the portion of equity capital raised through further public offerings, placements, and other secondary market activities, accounted for RM7.3 billion. This split demonstrates a balanced equity market where primary market dinamics—namely IPOs—coexist with ongoing secondary market activity that supports liquidity and capital deployment for existing issuers.

The bond and sukuk market remained the principal engine of capital formation in 2024, contributing a dominant RM124.2 billion to total funds raised. This sustained strength underscores the market’s continued appeal to borrowers seeking relatively stable, long-duration funding, as well as the investors seeking predictable cash flows in a global environment characterized by varying rates and risk appetites. Together, equity and debt markets produced the RM138.9 billion aggregate, illustrating a year in which Malaysia’s market structure demonstrated resilience and depth across asset classes. The SC’s annual observations indicate that even as external liquidity and risk flows shifted—reflected in net foreign equity outflows—the domestic market producers and participants anchored activity through robust participation from local institutional investors and a recovering domestic macro backdrop. The year thus showcased a diversified fundraising ecosystem capable of absorbing volume across multiple channels.

In addition to the headline figures, the SC noted a meaningful acceleration in sustainability-related financing. The issuance of sustainability-related instruments climbed to RM13.3 billion in 2024, up from RM8.7 billion in the prior year. This growth reflects a stronger emphasis on environmental, social, and governance (ESG) criteria among both issuers and investors, as well as the government’s push to embed sustainable finance as a core component of the capital market’s long-term development. Beyond traditional instruments, alternative fundraising platforms also demonstrated resilience and expansion, with equity crowdfunding and peer-to-peer (P2P) financing collectively raising RM2.6 billion in 2024, up from RM2.2 billion in 2023. The SC highlighted the critical role these platforms play in broadening financial inclusivity, particularly for micro, small, and medium-sized enterprises (MSMEs) that might otherwise struggle to access financing through conventional channels. The combination of more robust primary issuance, deeper debt markets, and a rising emphasis on sustainable finance formed a holistic growth narrative for the year.

The 2024 fundraising outcome thus reflects a multi-faceted expansion—equity markets supported by IPOs and increasingly agile secondary activity, a resilient fixed-income market, and a widening toolkit of alternative capital sources. This expansion occurs in a context where the government’s broader policy agenda emphasizes financial inclusion, sustainable development, and a stable macroeconomic framework that can attract and sustain capital formation. The SC’s assessment also points to the important role of supportive institutional behavior and market structure in enabling this growth, including the ongoing maturation of market platforms and the refinement of regulatory oversight that fosters investor confidence while maintaining market integrity.

Market performance, foreign flows, and domestic support dynamics

Malaysia’s stock market closed 2024 with a strengthened post-pandemic footing, as reflected by a total market capitalization of RM2.1 trillion, up from RM1.8 trillion at the end of 2023. The benchmark FBM KLCI advanced by 12.9%, finishing the year at 1,642.33 points, effectively reversing the prior year’s decline of 2.73% and signaling a broad-based rebound in investor sentiment. This performance amplified the relative strength of Malaysia’s equity market against regional benchmarks, with the SC pointing out that the market outperformed both the MSCI Asia Pacific and MSCI ASEAN indices during the period. The drivers behind this resilience included a combination of domestic input and external macro conditions that supported risk sentiment, a stronger ringgit against major currencies, and renewed investment interest from domestic institutions.

Notwithstanding the positive market performance, Malaysia recorded net foreign equity outflows of US$941.9 million (RM4.17 billion) in 2024, a marked increase compared with US$514.2 million in 2023. This dynamic underscores the ongoing rebalancing of cross-border flows in a global context characterized by shifting monetary policies and varying risk appetites among cross-border investors. In contrast to the foreign outflows, local institutional investors stepped forward as substantial buyers, accumulating RM9.99 billion worth of equities—an amount that is three times larger than the previous year’s activity. The SC emphasized that this support from local institutions was a critical factor in stabilizing markets and sustaining participation across different segments, even as foreign sentiment compressed in response to global liquidity conditions.

The SC’s analysis attributes the 2024 market breadth and resilience to a confluence of domestic factors. First, there was greater clarity in national policy rollouts, including initiatives such as NIMP 2030 (National Investment and Manufacturing Plan), NETR (National Economic Transformation Regulation), and NSS (National Strategic State initiatives). These policy elements provided a clearer growth roadmap for corporates and investors alike, contributing to earnings visibility and strategic investment planning. Second, Malaysia’s position within the global semiconductor value chain continued to support the equity market, with multiple analysts upgrading FBM KLCI targets on the basis of respected industry positioning and the potential for domestic firms to benefit from global demand cycles. Third, the SC noted a notable shift in market sentiment toward medium- and small-cap stocks, as evidenced by the outperformance of indices such as FBM Mid 70 and FBM Small Cap, indicating a broader investor interest beyond the large-cap core.

The year also saw a remarkable cohort of 38 stocks delivering annual returns of more than 100%, with significant contributions from the FBM Small Cap and FBM ACE Index, and exposure concentrated in the industrials and information technology sectors. This performance suggests a market environment conducive to identifying compelling value opportunities for investors who possess a solid understanding of market dynamics, sector trends, and company fundamentals. The breadth of returns emphasizes the importance of diversification and disciplined stock-picking in realizing substantial gains, while also reflecting overall market confidence in the ability of Malaysian firms to navigate a complex global landscape.

In the debt markets, Malaysia’s bond universe expanded as total bonds and sukuk outstanding rose to RM2.1 trillion from RM2.01 trillion in 2023. Government bonds remained a central engine for debt financing, underpinning market depth and investor liquidity. Net foreign inflows into the bond market moderated to RM4.78 billion in 2024, a decline from RM23.65 billion in 2023, highlighting a shift in cross-border demand for Malaysian fixed income and the sensitivity of government securities to the global rate environment. While the debt market enjoyed substantial overall issuance, the modestly lower foreign involvement in 2024 contrasts with the more aggressive foreign participation seen in certain other periods, reinforcing the importance of domestic demand and strategic policy support as factors stabilizing and enabling continued debt market activity. The bond market’s continued expansion underscores the strength of Malaysia’s credit markets and their capacity to support a broad set of issuers—from sovereigns and quasi-sovereigns to corporates and financial institutions—across a relatively long horizon.

Looking ahead, the SC articulated a constructive, albeit cautious, outlook for Malaysia’s capital market. The organization stressed that the market is positioned to maintain a steady growth trajectory, supported by domestic demand, sustained private sector investment, and ongoing government economic initiatives. However, the SC also cautioned that risks to growth remain tilted to the downside given current external challenges, including global financial volatility, supply chain disruptions, and external demand shifts that can impact export-oriented sectors. Nevertheless, the SC believes that continued supportive policy actions under frameworks such as the Ekonomi Madani and the deployment of National Economic Plans can provide meaningful tailwinds in the medium term. This perspective aligns with a broader view of a resilient economy that can translate policy clarity and investment incentives into tangible market performance, particularly as domestic demand strengthens and corporate earnings remain robust in sectors with structural growth potential.

Policy framework, macro context, and sectoral drivers of 2024 performance

Central to the 2024 performance story is the macro-policy environment that the SC and government crafted to support sustainable growth and market resilience. The SC’s analysis highlights a multi-pronged policy approach designed to improve clarity and predictability for investors while creating favorable conditions for capital formation. The NIMP 2030 framework, which outlines a strategic road map for industrial policy and investment, provides a stable backdrop for corporate expansion and investor confidence. The NETR and NSS add layers of regulatory and incentive-based support for transformative projects, including initiatives aimed at upgrading infrastructure, advancing technology adoption, and catalyzing productivity improvements across key sectors. The SC notes that these policy instruments helped to enhance earnings visibility for listed companies by providing clearer national trajectories and more predictable regulatory conditions. In parallel, fiscal consolidation measures, such as diesel subsidy rationalization, contributed to a more sustainable public finances picture. While these steps can affect consumer prices and certain business costs, they also support the long-run macroeconomic balance necessary for credible equity valuations and durable debt sustainability.

Beyond policy clarity, the 2024 performance benefited from Malaysia’s favorable position in the global semiconductor value chain. Analysts’ upgrades to FBM KLCI targets reflected the expectation that domestic firms would gain from global demand cycles and from Malaysia’s established footprint in key electronics and technology segments. The SC highlighted this as a signal of a favorable structural shift, suggesting that the market’s gains were not solely driven by cyclical factors but also by structural improvements in the economy’s growth potential. The positive sentiment extended to the broader market breadth, with mid-cap and small-cap stocks showing resilience and delivering outsized returns in many cases. This pattern aligns with a trend toward more inclusive participation across the market, wherein smaller and mid-sized issuers could harness improving earnings prospects and capital market access to support sustainable growth trajectories.

In terms of sectoral dynamics, the SC observed that a considerable portion of the performance came from industrials and information technology names, which aligns with the broader global technology and manufacturing themes. The attractiveness of these sectors likely derived from a combination of domestic policy incentives, local capacity development, and integration into the region’s supply chains. However, the SC also cautioned that external risk factors—such as global trade tensions, currency fluctuations, and external demand shifts—pose ongoing challenges. The robust performance in 2024, despite such risks, underscores the importance of a diversified investment environment and a well-balanced mix of assets that can absorb shocks while still delivering value to investors. The presence of a strong domestic institutional base, plus improving liquidity and market infrastructure, contributed to the market’s capacity to withstand adverse external conditions.

The SC’s outlook also references the broader macroeconomic framework of the Ekonomi Madani, a policy initiative designed to sustain inclusive growth and broad-based development across sectors and regions. The Ekonomi Madani framework is anticipated to provide ongoing policy support that can help domestic players weather external headwinds and maintain investment momentum. The combination of policy clarity, structural drivers in key industries, and a favorable macro environment forms the basis for a positive medium-term outlook, even as the SC acknowledges that external challenges may compress growth and alter risk-return dynamics. In essence, the 2024 performance is framed as a validation of Malaysia’s strategic development direction, combining strong domestic demand, policy coherence, and a diversified, resilient capital market capable of supporting a range of investors across asset classes.

Sustainability finance and the expanding toolkit of fundraising channels

A notable development in 2024 was the acceleration of sustainability-focused financing. The SC recorded a meaningful uptick in sustainability-related instrument issuances, which rose to RM13.3 billion from RM8.7 billion the year prior. This growth reflects a continued shift by issuers toward integrating ESG considerations into their financing strategies, as well as investor demand for instruments with clear environmental and social outcomes. The expanding supply of sustainable finance products aligns with global investor preferences, providing corporations with avenues to fund strategic initiatives while enabling capital markets to contribute to environmental stewardship and social impact.

Parallel to sustainability instruments, alternative fundraising platforms gained traction. Equity crowdfunding and P2P financing collectively raised RM2.6 billion in 2024, a modest rise from RM2.2 billion in 2023. The SC emphasized the crucial role these channels play in enhancing financial inclusivity, particularly for micro, small, and medium enterprises. The growth of these platforms represents a meaningful evolution in Malaysia’s financial landscape, expanding access to capital for smaller firms that might not easily access traditional bank credit or large-scale capital markets. In practical terms, this means more startups and MSMEs can pursue growth initiatives, fund working capital, or scale production through diversified funding sources. While these platforms present opportunities, the SC’s attention to risk management and investor protection remains a central aspect of ongoing regulatory refinement to ensure sustainable, safe growth.

The sustainability and alternative financing narratives connect to a broader strategic aim: to foster a capital market ecosystem that supports inclusive growth while maintaining robust risk controls and governance standards. By aligning fundraising channels with long-term development goals, Malaysia’s market infrastructure is designed to attract a wider set of participants, from institutional investors seeking stable, long-dated assets to individual and micro-investors seeking access to growing businesses and new sectors. The regulatory framework and supervisory oversight are critical in ensuring that these varied instruments operate within a coherent risk management regime, preserving market integrity while encouraging responsible investment and informed participation.

Domestic support, foreign outflows, and the role of policy in 2024

The 2024 market narrative highlights a pronounced dynamic: strong domestic support, anchored by local institutions, helped offset persistent or rising foreign outflows in equities. The SC observed that the robust purchasing activity by institutional investors provided a stabilizing counterbalance to outflows and contributed to market resilience at a time when foreign participation weakened. This domestic support is a fundamental feature of Malaysia’s market structure, reflecting a mature base of asset managers, pension funds, insurance companies, and other institutions that actively allocate capital in line with strategic investment plans and risk management objectives. The capacity of these institutions to absorb equities, particularly in periods of volatility or uncertainty, is a key factor in maintaining liquidity and orderly markets.

From a policy perspective, the SC’s outlook incorporates the Ekonomi Madani framework and National Economic Plans as growth catalysts anticipated to deliver medium-term gains. These arrangements are designed to sustain macroeconomic stability, encourage private sector investment, and foster a climate conducive to capital formation. In practice, this translates into continued regulatory clarity, targeted incentives for strategic industries, and financing mechanisms designed to support economic transformation. While external risks remain—ranging from global macro shocks to commodity price volatility—the domestic policy environment provides a scaffold that can help the capital market navigate these challenges without derailing growth trajectories. The SC’s emphasis on medium-term tailwinds suggests a strategic orientation toward patient, fundamentals-based investing, which can help maintain investor confidence and support premium valuations for quality issuers.

The combination of domestic demand strength, policy direction, and a resilient ringgit contributed to a scenario in which the market could sustain a positive trajectory even in the face of external headwinds. The SC’s assessment indicates that investors remained attracted to sectors with clear earnings visibility, robust cash flows, and the potential for structural growth, while the market resized expectations in response to evolving macro conditions. In this context, the SC’s 2024 Annual Report highlights that the capital market’s capacity to adapt—through diverse fundraising channels, a broadened instrument universe, and ongoing market development—positions Malaysia to maintain a stable growth path as it navigates external challenges and internal reforms.

Market breadth, sectoral leadership, and the evidence of opportunity

The 2024 market breadth demonstrated that a broad set of sectors contributed to overall strength. The notable performance of mid- and small-cap segments indicates an evolving market sentiment that favors a wider share of the equity universe, not just the largest, most liquid names. The FBM Mid 70 and FBM Small Cap indices outperformed expectations, signaling that the investment opportunity set was not confined to a narrow subset of issuers. The predominance of industrials and information technology stocks among those delivering annual returns exceeding 100% underscores the sectoral themes that resonated with investors and highlights the potential for upside in companies that are well-positioned to benefit from competitive dynamics, productivity gains, and innovation-led growth. For investors, this breadth implies a need to maintain diversified portfolios that can capture gains across a spectrum of growth drivers, while still applying disciplined risk management to navigate the volatility associated with smaller-cap segments.

From a valuation perspective, the year’s strong performance across different segments points to a market that priced in both near-term earnings momentum and longer-term structural improvements. This balance is consistent with the broader investment environment in which domestic policy clarity and macro resilience provide a robust foundation for equity valuations. The SC’s commentary suggests that market participants should remain mindful of the external risk set, including global rate movements and geopolitical developments that could influence risk appetites and capital flows. However, the combination of domestic institutional support, a diversified fundraising landscape, and a continued emphasis on sustainable finance creates a balanced, forward-looking environment in which investors can identify solid opportunities with favorable risk-adjusted returns.

In the debt market, government bonds continued to anchor the market’s depth and liquidity. While foreign inflows moderated compared with the prior year, the domestic demand framework and the ongoing issuance of government securities ensured that debt markets remained reliable channels for funding and portfolio diversification. The sustainability of this dynamic depends on continued fiscal discipline, credible monetary policy, and the capacity of the public sector to implement reforms that bolster long-term growth and credit quality. Taken together, these sectoral dynamics reinforce the message that Malaysia’s capital market in 2024 was characterized by breadth, resilience, and a strategic tilt toward sustainable, inclusive growth across multiple financing channels.

Regional performance and the outperformance narrative

Malaysia’s capital market continued to outpace many of its regional peers in 2024, even as net foreign equity outflows persisted. The SC notes that the market’s superior performance was achieved despite these outflows, pointing to the stabilizing influence of domestic demand, favorable policy direction, and a ringgit that recovered against major currencies. The comparison with regional indices underscores Malaysia’s ability to attract sustained participation from local investors, maintain liquidity, and capitalize on domestic corporate activity while external capital moves played out on the global stage. This performance highlights a nuanced leadership story: Malaysia’s market was not insulated from the global environment, but its structural strengths, regulatory enhancements, and policy-driven growth trajectory allowed it to deliver relative outperformance against peers who faced different domestic and international dynamics.

The outperformance narrative also aligns with the SC’s broader emphasis on market development and inclusivity. By expanding the instrument mix, supporting sustainable finance, and promoting alternative financing channels, Malaysia’s capital market became more resilient and capable of absorbing shocks while offering investors a wider range of opportunities. The 2024 outcomes illustrate how a well-balanced approach—combining traditional equity and debt markets with innovative fundraising platforms and ESG-oriented instruments—can yield sustainable gains and attract a diverse set of market participants. The scalability of such an approach depends on ongoing policy consistency, continued market infrastructure improvements, and the ability to maintain rigorous risk management practices that protect investors while enabling growth.

Outlook and risk management for the medium term

Looking forward, the SC’s 2024 assessment emphasizes a steady growth trajectory underpinned by domestic demand, private sector investment, and ongoing government initiatives. The Ekonomi Madani framework and National Economic Plans are identified as important policy levers that can provide a conducive environment for continued market expansion. Yet the SC’s caveat about downside risks remains prudent: external shocks, exchange rate volatility, and shifts in global capital flows could moderate the pace of growth in the medium term. The challenge for policymakers and market participants will be to sustain the momentum by maintaining policy clarity, continuing to improve market infrastructure, and ensuring that the regulatory environment fosters responsible investment and robust risk management.

For market participants, the medium-term outlook implies opportunities across multiple asset classes and sectors, particularly in areas tied to structural growth themes such as technology, manufacturing modernization, and green finance. Investors may find more compelling opportunities through a combination of IPO pipelines, selective equity investments in mid- and small-cap segments with strong earnings prospects, and a diversified fixed-income strategy that leverages both government and high-quality corporate debt. The SC’s framework suggests that heightened attention to ESG considerations, governance standards, and investor protection will remain critical to sustaining confidence and ensuring that market growth translates into durable economic benefits for a broad cross-section of society.

Conclusion

Malaysia’s capital market in 2024 demonstrated a resilient, multi-faceted growth trajectory. Total funds raised reached RM138.9 billion, marking an 8.8% rise from the prior year, driven by a robust IPO pipeline, sustained bond and sukuk issuance, and renewed investor confidence that helped counterbalance foreign equity outflows. Equity fundraising benefited from 55 IPOs, which raised RM7.4 billion, while secondary equity activities added RM7.3 billion, and bond and sukuk markets contributed RM124.2 billion to the total. The year also highlighted a shift toward sustainability as issuances of sustainability-related instruments grew to RM13.3 billion, complemented by the continued expansion of alternative fundraising channels—equity crowdfunding and P2P financing—collectively raising RM2.6 billion. Despite external headwinds, domestic institutional investors stepped in to support the market, underpinning a strong year for the FBM KLCI, which rose 12.9% to finish at 1,642.33 points and driven by a broader market breadth that saw substantial gains among mid- and small-cap equities.

Looking ahead, the SC expects Malaysia’s capital market to maintain a steady growth trajectory, anchored by domestic demand, private sector investment, and ongoing government initiatives under the Ekonomi Madani framework and National Economic Plans. While downside risks persist due to external challenges, policy clarity and continued market development are likely to provide a supportive tailwind in the medium term. The combination of a diversified fundraising landscape, a resilient domestic investor base, and a strategic policy environment positions Malaysia to sustain growth, expand inclusive access to finance, and strengthen its role as a regional capital market hub. This comprehensive performance underscores the market’s evolving maturity and its capacity to deliver value for a broad spectrum of participants—from large institutional investors to MSMEs leveraging innovative funding channels.