Maybank Investment Bank: Capital raising activities expected to return to pre-pandemic levels in 2021

Maybank Investment Bank Bhd chief executive officer Fad’l Mohamed said Malaysia’s bond and sukuk markets have been widely tapped for infrastructure projects in recent years and this trend is expected continue into 2021. — Picture by Hari Anggara
Maybank Investment Bank Bhd chief executive officer Fad’l Mohamed said Malaysia’s bond and sukuk markets have been widely tapped for infrastructure projects in recent years and this trend is expected continue into 2021. — Picture by Hari Anggara

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KUALA LUMPUR, April 19 — The Malaysian capital market activity is on track to improve in 2021, with fundraising interest across some sectors showing a return to pre-pandemic levels, said Maybank Investment Bank Bhd.

Chief executive officer Fad’l Mohamed said there were increased interest across equity and debt capital markets, as well as in the mergers and acquisitions (M&A) space.

He said there were also strong keen interest from first-time issuers (initial public offerings) across three categories of companies in the equity space.

The categories are, namely companies which have benefited from the Covid-19 (gloves and healthcare); companies which have weathered the pandemic well and have shown resilience (finance and fintech); and companies, which were initially impacted by Covid-19 but have subsequently recovered at a stronger than expected pace (logistics and selected real estate players).

“In debt capital markets, we expect activity to match those prior to the onset of the pandemic, although corporate fundraising is currently focused more on refinancing and infrastructure, rather than new capacity building,” he said in a statement today.

Fad’l said Malaysia’s bond and sukuk markets have been widely tapped for infrastructure projects in recent years and this trend is expected continue into 2021.

In addition, heightened activity can be expected in the M&A space as confidence returns to the market.

He said M&A is also likely to be driven by ongoing trends of private equity investors looking to monetise their investments and multinational corporations reviewing their scale of operations.

“The ongoing pandemic of the past 12 months has demonstrated the resilience of Malaysia’s capital markets, which will continue to remain broad and deep enough to support capital raising activity.

“The successful completion of the RM1.5 billion IPO by MR D.I.Y. Group (M) Bhd, which continued to see strong aftermarket performance with active participation from foreign institutional investors, and the strong bonds and sukuk volume of RM104 billion seen in 2020 provide a lot of comfort that there is still ample liquidity in the market,” he noted.

Fad’s said the low interest rate environment continues to support domestic liquidity.

Total funds invested in Malaysia by licensed fund management companies grew from RM620.1 billion in 2019 to RM649.5 billion at end-2020 despite Covid-19. — Bernama

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