Economic Report 2013/2014: Banking system, capital market stronger

by **Cals** Sat 26 Oct 2013, 21:07

Published: Saturday October 26, 2013 MYT 12:00:00 AM
Updated: Saturday October 26, 2013 MYT 9:23:31 AM
Economic Report 2013/2014: Banking system, capital market stronger
DURING the first eight months of 2013, the banking system and capital market were further strengthened to facilitate and catalyse growth of the economy as Malaysia transitions to a high-income and developed nation.
Financial intermediation continued to support economic activities with total loans outstanding in the banking sector increasing 9.3% to RM1,180.3bil as at end-August 2013.
Meanwhile, total financing outstanding of development financial institutions (DFIs) increased 8.5% to RM117bil, particularly to strategic economic sectors.
Micro-financing was also extended through the Skim Pembiayaan Mikro, Amanah Ikhtiar Malaysia (AIM) and Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN Nasional) to support micro-enterprises.
The capital market remains an important source of financing for companies, with total private bonds outstanding amounting to RM415.3bil and market capitalisation of the equity market increasing to RM1,598.8bil as at end-August 2013.
In January 2013, a new sukuk asset class was launched on Bursa Malaysia, making sukuk and bonds available to all investors for the first time. The DanaInfra Retail Sukuk issued by Danalnfra Nasional Bhd was used to partly fund the current MY Rapid Transit (MRT) project.
Malaysia continues to be a global hub for Islamic finance with a deep primary and active secondary sukuk market, an efficient price discovery mechanism, a diverse talent base with global capabilities, and an efficient multi-currency clearing and settlement system.
Furthermore, with the new Islamic Financial Services Act 2013 (IFSA) that came into force in June this year, there will be greater clarity in the legal and prudential requirements underpinned by syariah principles on the Islamic finance industry.
The Act will strengthen the regulatory and legal system to meet the challenges and developments of an increasingly sophisticated and internationalised industry.