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Malaysia fund management industry assets up nearly 2% in April

By Goh Thean Eu  
Jun 13, 2019

The Malaysian fund management industry’s assets rose 1.88% in April and increased 5.74% through the first four months of the year from broad-based gains, including in stock and bonds funds and private equity.

Total assets under management (AUM) stood at 786.25 billion ringgit (US$188.91 billion) as at April 30, up from 771.72 billion ringgit at the end of March, and 743.58 billion ringgit at the beginning of the year, according to latest data posted on Securities Commission Malaysia's (SC) website.

The regulator typically publishes the data without providing analysis.

A Kuala Lumpur-based fund manager attributes the gain primarily to improved investor sentiment in the stock market after several large projects that were halted following an unexpected change of government last year were finally given the go-ahead.

"I think investors were happy to see that major infrastructure projects like Bandar Malaysia and East Coast Rail Link [ECRL] - which were once put on hold - have been given the green light to proceed," the fund manager tells Asia Asset Management, speaking on condition of anonymity.

Bandar Malaysia is a 196-hectare integrated property development project with an estimated gross development value of 200 billion ringgit.

ECRL is a rail project that connects the Malaysian capital of Kuala Lumpur to major towns in the east coast of Peninsular Malaysia. The project is estimated to be worth 44 billion ringgit.

Both projects were first announced under the administration of former Prime Minister Najib Razak, who was defeated at the 2018 general election by a coalition of opposition parties led by current Prime Minister Mahathir Mohamad.

The SC’s figures show that AUM of equity funds rose 2.64% month-on-month to 382.18 billion ringgit in April, and was up 8.8% from January.

Assets of bond funds climbed 0.92% to 168.28 billion ringgit in April and increased 5.9% through the first four months of 2019.

Feeder funds had 30.03 billion ringgit of assets, 1.9% higher than in March and up 10.16% since January.

Assets of private equity and unquoted stocks were at 12.51 billion ringgit in April, up 1.79% on a monthly basis and 6.29% since the beginning of the year.

Only money market funds registered a decline through the four-month period, with AUM down 6.15% to 158.20 billion ringgit though it edged up 0.43% from March.

"The decline was mainly due to investors shifting their investments to assets like equities and bonds," the fund manager says.