Securities Commission to ease fundraising rules, though some firms may hold off

The Securities Commission said on Thursday it will ease fundraising rules for listed companies while acknowledging some firms may hold off on capital raising due to uncertainty over the coronavirus outbreak.

The regulator gave no further details of the measures in slides presented to the media but said companies may delay fundraising to reassess business needs after the lockdown and reevaluate market conditions after listing.

Malaysia has imposed a nationwide lockdown until April 28 to contain the spread of the virus. It has the highest number of cases in Southeast Asia with over 5,000, but new infections are slowing.

The regulator will also liberalise digitisation of investment products, advertising and promotions.

It said that the domestic capital market has been affected by the global public health emergency caused by the outbreak but conditions have remained orderly and continued to be supported by ample domestic liquidity.

Investment banks and brokers are well-capitalised while the fund management industry is now more diversified and has liquidity management processes to mitigate risks, it said.

Malaysian funds have increased offshore investments to 25 percent and reduced exposure to equities to less than half last year.

Total funds raised in the first quarter of this year were RM22.7 billion, of which RM22 billion were from bonds and Islamic bonds, or sukuk.

"Based on industry feedback, we do expect the issuances of corporate bonds and sukuk for this year to be in the region of RM90 to RM100 billion," Deputy chief executive Zainal Izlan Zainal Abidin told a virtual press briefing.

In 2019, Malaysian corporate bonds and sukuk market saw a 26 percent increase to RM132.82 billion worth of issuances.

He said Islamic bonds have accounted for an average 70 percent of corporate issuances in the past three years and would likely continue so.

- Bernama