KUALA LUMPUR, March 15 — Malaysia's securities regulator said today it expects fundraising of RM120 billion in the domestic market this year, above the five-year average of RM114 billion.

Malaysia saw a record high RM146.6 billion raised last year, a bulk of it coming from corporate bond and sukuk segment which grew 46 per cent in 2017 to RM124.9 billion.

Chairman Tan Sri Ranjit Ajit Singh called 2017 an outlier year and said the corporate bond and sukuk market continues to have a favourable outlook.

"The 2017 number was an exceptionally strong outlier due to a multitude of factors. There was this equal anticipating of rate hikes and there were companies that deferred capital raising from 2015 and 2016, and did it by 2017,” Ranjit told the press.

This year, domestic fundraising is expected to be mainly driven by the corporate bonds and sukuk market, for infrastructure financing and refinancing, the regulator said in its annual report.

Corporate bonds and sukuk will account for about RM100 billion of total fundraising this year, while the rest will be via equity capital markets, the Securities Commission said.

The regulator also expects initial public offerings this year to raise about RM8 billion, up from RM7.2 billion in 2017.

"Based on our conversations with the industry, and a look at the pipeline, it's indicating another strong year for fundraising. The Malaysian capital market will continue to outpace growth in developed market,” Ranjit added.

Malaysian public listed corporations were also expected to see earnings recovery continue in 2018, driven by improving trade and exports, a pick up in commodity prices, stable domestic household expenditure and possible higher rates that would support the finance sector.

The South-east Asian nation's capital market expanded 12.6 per cent to RM3.2 trillion last year, buoyed by economic fundamentals, recovery in corporate earnings, firm private investments and foreign investment inflows and more investor participation, the regulator said. — Reuters