MALAYSIA

CAPITAL MARKETS MALAYSIAMalaysia enjoys an enviable market leading position in the global capital market with its spectrum of unique offerings. In the fixed income market, Malaysia has the largest bond market in ASEAN and is amongst the top three countries with the highest bonds outstanding in Asia. Home to the highest number of public listed companies (PLCs) in ASEAN, Malaysia also hosts the largest unit trust industry and continues to lead the market in the global sukuk market. In recognition of the significant achievements in the Malaysian capital market, Malaysia was upgraded to an Advanced Emerging Market in the FTSE Global Equity Index Series in 2013. Against this backdrop, Capital Markets Malaysia (CMM) was established by the Securities Commission Malaysia to optimise further development and internationalisation of Malaysia’s capital market. CMM focuses its efforts on the four primary pillars of the market: Equities, Fixed Income, Asset Management and Alternative Assets. Furthermore, CMM highlights the importance and relevance of the Islamic Capital Market (ICM) and Sustainable and Responsible Investment (SRI) framework which cut across all pillars and market segments to enable the expansion of the spectrum of product offerings to issuers and investors in the Malaysian capital market. As one of the most developed economies in Southeast Asia, Malaysia offers many opportunities for capital market investment growth. A strong governance infrastructure, coupled with intuitive government support, enables an efficient marketplace that has naturally become a global marketplace for niche areas like fixed income and Islamic capital products. Moreover, Malaysia’s leading role in the development of the ASEAN regional bloc and the Trans-Pacific Partnership (TPP), presents an opportunity for strong growth potential in the near future. Accordingly, the Malaysian market is an ideal platform for PLCs and small- to medium-sized companies seeking innovative and wide-reaching modes of capital formation. Investors, in turn, can be confident of generating sustainable long-term investment returns that will be driven by stable long-term growth prospects in the commodities, manufacturing and services industries. Lastly, a growing region driven by a young population and exponential growth potential makes Malaysia and ASEAN a favourable choice compared to more mature markets. The sustainable, inclusive and innovative nature of the Malaysian capital market is poised to continue to optimise economic growth. CMM leads the charge in positioning Malaysia as one of the world’s favoured destinations for investments and fundraising by providing valuable insights from authorities while supporting issuers and investors in accessing the full spectrum of instruments andmaintaining an independent dedication to industry advancement.

SECURITIES COMMISSION MALAYSIA (SC) The Securities Commission Malaysia (SC), a statutory body reporting to the Minister of Finance, Malaysia, was established under the Securities Commission Act 1993. It is the sole regulatory agency for the regulation and development of capital markets. The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Capital Markets and Services Act 2007. More information about the SC is available on its website at www.sc.com.my.

CAPITAL MARKETS MALAYSIAMalaysia enjoys an enviable market leading position in the global capital market with its spectrum of unique offerings. In the fixed income market, Malaysia has the largest bond market in ASEAN and is amongst the top three countries with the highest bonds outstanding in Asia. Home to the highest number of public listed companies (PLCs) in ASEAN, Malaysia also hosts the largest unit trust industry and continues to lead the market in the global sukuk market. In recognition of the significant achievements in the Malaysian capital market, Malaysia was upgraded to an Advanced Emerging Market in the FTSE Global Equity Index Series in 2013. Against this backdrop, Capital Markets Malaysia (CMM) was established by the Securities Commission Malaysia to optimise further development and internationalisation of Malaysia’s capital market. CMM focuses its efforts on the four primary pillars of the market: Equities, Fixed Income, Asset Management and Alternative Assets. Furthermore, CMM highlights the importance and relevance of the Islamic Capital Market (ICM) and Sustainable and Responsible Investment (SRI) framework which cut across all pillars and market segments to enable the expansion of the spectrum of product offerings to issuers and investors in the Malaysian capital market. As one of the most developed economies in Southeast Asia, Malaysia offers many opportunities for capital market investment growth. A strong governance infrastructure, coupled with intuitive government support, enables an efficient marketplace that has naturally become a global marketplace for niche areas like fixed income and Islamic capital products. Moreover, Malaysia’s leading role in the development of the ASEAN regional bloc and the Trans-Pacific Partnership (TPP), presents an opportunity for strong growth potential in the near future. Accordingly, the Malaysian market is an ideal platform for PLCs and small- to medium-sized companies seeking innovative and wide-reaching modes of capital formation. Investors, in turn, can be confident of generating sustainable long-term investment returns that will be driven by stable long-term growth prospects in the commodities, manufacturing and services industries. Lastly, a growing region driven by a young population and exponential growth potential makes Malaysia and ASEAN a favourable choice compared to more mature markets. The sustainable, inclusive and innovative nature of the Malaysian capital market is poised to continue to optimise economic growth. CMM leads the charge in positioning Malaysia as one of the world’s favoured destinations for investments and fundraising by providing valuable insights from authorities while supporting issuers and investors in accessing the full spectrum of instruments andmaintaining an independent dedication to industry advancement.

SECURITIES COMMISSION MALAYSIA (SC) The Securities Commission Malaysia (SC), a statutory body reporting to the Minister of Finance, Malaysia, was established under the Securities Commission Act 1993. It is the sole regulatory agency for the regulation and development of capital markets. The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Capital Markets and Services Act 2007. More information about the SC is available on its website at www.sc.com.my.

Services

Manufacturing

Mining

Agriculture

Construction

Others

Electrical & Electronic Products

Oil & Gas Products

Chemical & Chemical Products

Palm Oil

Manufactures of Metal

Optical & Scientific Equipment

Rubber Products

Other Products

Machinery, Appliances & Parts

MALAYSIA’S ECONOMY

Malaysia has a diversified economy and is a leading exporter of electrical appliances, electronic parts and components, palm oil, and natural gas.

Malaysia has matured from an emerging market into an advanced emerging market, creating niche areas of expertise and providing stable long-term growth.

With Malaysia’s chairmanship of ASEAN and the establishment of the ASEAN Economic Community (AEC) in 2015, economic integration amongst ASEAN members will be a key focus with a target for a single market and production base, which will provide ample growth opportunities for investors in Malaysia within and beyond the ASEAN community.

DIVERSITY

STABILITY

OPPORTUNITIES

2.6%3.3%4.5%

4.6%

5.1%

7.1%

16.3%

20.9%

35.6%53.5%

23.0%

8.9%8.8%

4.4%

1.4%

GDP by SectorRM1,063 billion(2015)

Building on the strength of a globally competitive manufacturing base, Malaysia has now realigned itself into a service-driven economy.

Major ExportsRM780 billion(2015)

Historically a commodities-driven economy, Malaysia now has a balanced export portfolio. Malaysia’s commodities industry exports account for only 26% of total exports.

1

Global RankingsMalaysia continues to be globally recognised as a competitive business focused country.

GDP Annual GrowthMalaysia’s GDP growth outpaced ASEAN-5 GDP growth rate in the last 2 years.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

1200

1000

800

600

400

200

0

523 526 555 587626 660 697

741776 765

821865

912955

1,0131,063

Malaysia GDP (RM billion) Malaysia GDP growth (%) ASEAN-5 GDP growth (%)

4th World BankMinority Investor Protection, 2015

4th IMD World Talent Report Ranking, 2015

14th IMD World Competitiveness, 2015 18th WEF Global Competitiveness

Report, 2015

18th World BankDoing Business, 2015

Note:(1) 2015 ASEAN-5 GDP growth is an IMF estimate(2) Malaysia GDP (RM billion) and all GDP growth rates at constant 2010 prices

(continued from previous page)

2

Global RankingsMalaysia continues to be globally recognised as a competitive business focused country.

GDP Annual GrowthMalaysia’s GDP growth outpaced ASEAN-5 GDP growth rate in the last 2 years.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

1200

1000

800

600

400

200

0

523 526 555 587626 660 697

741776 765

821865

912955

1,0131,063

Malaysia GDP (RM billion) Malaysia GDP growth (%) ASEAN-5 GDP growth (%)

4th World BankMinority Investor Protection, 2015

4th IMD World Talent Report Ranking, 2015

14th IMD World Competitiveness, 2015 18th WEF Global Competitiveness

Report, 2015

18th World BankDoing Business, 2015

Note:(1) 2015 ASEAN-5 GDP growth is an IMF estimate(2) Malaysia GDP (RM billion) and all GDP growth rates at constant 2010 prices

(continued from previous page)

Capital Market

Equity Market

Fixed Income Market

Islamic Capital Market

RM2.04 trn

RM1.28 trn

RM0.76 trn

RM1.05 trn

RM2.82 trn

RM1.70 trn

RM1.12 trn

RM1.70 trn

2010

2015

USAUS SEC Approval:“Designated Offshore Securities Market” recognition to ease trading in Malaysian listed securities & bonds by US investors

CFTC Approval:Approval from US Commodity Futures Trading Commission (CFTC) to enable Malaysian Futures brokers to deal with US customers

Approval from US CFTC to attract US-based commodity traders into our Derivatives Market via direct market access

Malaysia and Dubai Islamic Collective Investment Schemes MRA

Dubai Financial Services Authority (DFSA) and Malaysia signed an MRA facilitating cross border distribution and marketing of Islamic funds between Malaysia and the Dubai International Financial Centre (DIFC).

Malaysia – HK Islamic MRA

Malaysian capital market intermediaries will be allowed to distribute their Islamic products in Hong Kong’s financial hub with minimal regulatory intervention. Similarly, Islamic funds that are authorised and primarily regulated by the SFC and managed by SFC-licensed managers can now be marketed in Malaysia.

DUBAI

CBRC Recognition:

First emerging market to receive QDII Status

One of the first central banks to receive QFII Status

Received RQFII Status

CHINA

HONGKONG

CAPITAL MARKET OVERVIEW

A key measure of the capital market is the extent to which it facilitates capital formation as well as income growth through the ability of individuals to benefit from opportunities in the capital market, be it directly or indirectly.

The Malaysian capital market has evolved significantly over the years, building expertise in the asset management segment and reinforcing its lead in the fixed income segment through its niche position as a leader in Islamic capital market products. It is now steadfastly being recognised as an international marketplace for both investors and issuers.

Consistent and steady growth was registered in the overall Malaysian capital market in key categories.

Global ConnectionsThis sustained growth in the Malaysian capital market reflects a resilient and thereby stable market that is able to withstand global economic and financial challenges. In addition, regulators of the market have built international connectivity that further enhances the international perspective of the Malaysian market.

FTSE Upgrade:

Promoted to Advanced Emerging Market status in FTSE Global Equity Index Series

3

Market Capitalisation in ASEAN

Other

Japan

Australia

Taiwan

Malaysia

China

348.8

238.8

51.9

353.3383.0

640.0

Singapore Exchange Bursa Malaysia Indonesia SE The Stock Exchangeof Thailand

Philippines SE HoChiMinh SE

EQUITY

Malaysian Equity Market Known for its Stability and ResilienceEach MSCI Risk Weighted index reweights all the constituents of a cap weighted MSCI parent index so that stocks with lower historical return variance are given higher index weights. By emphasizing low volatility stocks in this way, the MSCI Risk Weighted Indices historically produce higher return and lower realized volatility compared to their respective parent MSCI indices, while maintaining reasonable liquidity and capacity. In general, MSCI Risk Weighted Indices tend to have a bias towards stocks with lower volatility.

Other

South Korea

Australia

Taiwan

Malaysia

China

25%

34%

12%

8%

9%

12%

35%

10%

11%

16%

16% 12%

MSCI Asia Pacific Risk Weighted Index(as at 29 Feb 2016)

MSCI Asia Pacific ex Japan Risk Weighted Index(as at 29 Feb 2016)

(USD billion, as at 31 Dec 2015)

2nd largest equity market In Asean.

4

Market Capitalisation in ASEAN

Other

Japan

Australia

Taiwan

Malaysia

China

348.8

238.8

51.9

353.3383.0

640.0

Singapore Exchange Bursa Malaysia Indonesia SE The Stock Exchangeof Thailand

Philippines SE HoChiMinh SE

EQUITY

Malaysian Equity Market Known for its Stability and ResilienceEach MSCI Risk Weighted index reweights all the constituents of a cap weighted MSCI parent index so that stocks with lower historical return variance are given higher index weights. By emphasizing low volatility stocks in this way, the MSCI Risk Weighted Indices historically produce higher return and lower realized volatility compared to their respective parent MSCI indices, while maintaining reasonable liquidity and capacity. In general, MSCI Risk Weighted Indices tend to have a bias towards stocks with lower volatility.

Other

South Korea

Australia

Taiwan

Malaysia

China

25%

34%

12%

8%

9%

12%

35%

10%

11%

16%

16% 12%

MSCI Asia Pacific Risk Weighted Index(as at 29 Feb 2016)

MSCI Asia Pacific ex Japan Risk Weighted Index(as at 29 Feb 2016)

(USD billion, as at 31 Dec 2015)

2nd largest equity market In Asean.

3,371 3,225 3,1433,553

3,9374,352

Malaysia Philippines Vietnam Indonesia Thailand Singapore

2010 2011 2012 2013 2014 2015

63%60%65% 61% 62% 65%

40% 37%35%

39% 38% 35%1,275 1,2851,466

1,702 1,651 1,695

5.9% CAGR 2010 - 2015

Shariah compliant

Non-Shariah compliant

Sectors Listed by Market CapUSD383 billion, 903 PLCs(Dec 2015)

Banks

Telco

Industrial Goods& ServicesF&B

Utilities

Oil & Gas Others

Healthcare

Travel & Leisure

ChemicalsConstruction & Materials

Real Estate Foreign

Domestic

Domestic/Foreign Ownership by Market Cap USD383 billion (Dec 2015)

22%

78%

Funds Raised from Secondary Market in ASEAN(USD billion, as at 31 Dec 2015)

Market Capitalisation(RM billion)

Bursa Malaysia Profile

Highest funds raised from secondary market in ASEAN.

65% of the market capitalisation is Shariah compliant.

Largest number of listed companies provides diversified exposure to varied industries.

Strong domestic presence in the market provides investors with stability against global volaitility.10%

7%

7%7%6%

5%

5%

4%

10%

11%

11%

17%

5

2010 2011 2012 2013 2014 2015

60%63%63% 59% 57%

37%40%

37%41%

43%

142178

229269 301

54%

46%

261

Government

Corporate

220%

130%

94%80% 73% 66% 56%

36%20% 15%

Japan South Korea Malaysia Singapore Thailand Hong Kong China Philippines Vietnam Indonesia

Overview of Asian Countries’ Fixed Income Market

Conventional

Sukuk

2005 2006 2007 2008 2009 2010 2011 2012 2013 20152014

71% 68% 64% 64% 61% 61% 58% 53% 50% 46%

418 453557 586 644

763 841

1,008 1,031 1,1251,110

48%29% 32%

36% 36% 39%39% 42%

47% 50% 54%52%

10.4% CAGR 2005 - 2015

Malaysia

Rest of the World

FIXED INCOME

(local currency bonds as a % of GDP, as at 30 Sep 2015)

Malaysian Fixed Income Market(RM billion)

Global Sukuk Market(USD billion)

3rd largest bond market in Asia & largest in ASEAN.

Phenomenal growth in the fixed income market due to the rapid expansion of the Malaysian sukuk market.

Malaysia consistently remains the leading international marketplace for Islamic fixed income fundraising.

6

2010 2011 2012 2013 2014 2015

15%13% 16% 17% 18%

87% 85%84%

83% 82%377

424505

588 630

20%

80%

668

12.1% CAGR 2010 - 2015

AberdeenAsset

ManagementGoldman

SachsAmundi

Malaysia

NomuraAsset

Management

BNPParibasAsset

Management

ThreadneedleInvestments

FranklinTempleton

Investments

FUND MANAGEMENT

Islamic

Conventional

Assets under Management (AuM) Growth

International Industry Presence

(RM billion, as at 31 Dec 2015)

Global Islamic AuM by Domicile USD60.2 billion (as at 30 Sep 2015) industry with

phenomenal growth rate

Experience in both conventional and Islamic

Varied product investment experience

growth rate

20% of total AuM is Shariah compliant

Key international players have based operations out of Malaysia since 2005.

Unit Trust

Corporate

EPF

Wholesale

Individual

Private Pension

Charitable Bodies

Others

13%

15%

52%

0.6%0.1%

7%1%

12%

AuM Asset AllocationRM668 billion(as at 31 Dec 2015)

2nd largest Islamic AuM globally.

5%

41%

2%

6%

2%2%

28%

5%9%

Luxembourg

USA

Jersey Island

Pakistan

Malaysia

South Africa

Kuwait

Saudi Arabia

Others

7

ISLAMIC CAPITAL MARKET

Islamic Equity

The leading exchange in ASEAN for Shariah compliant investment

Global leader in Shariah compliant unit trust

Market Cap

Sukuk

Total Islamic Assets(RM billion)

listed companies are Shariah compliant

74%market capitalisation of Shariah compliant

stocks

64%

Sukuk Islamic Unit Trust

market share of global sukuk

outstanding

54%market share

of global sukuk issuance

53%Net Asset

Value

RM52bShariah compliant unit trust funds

launched

193

2010 2011 2012 2013 2014 2015

70%72% 67% 67% 64% 64%

28% 30%33%

33% 36%36%

1,0531,160

1,4221,557 1,604

1,694

10.0% CAGR 2010 - 2015

8

ISLAMIC CAPITAL MARKET

Islamic Equity

The leading exchange in ASEAN for Shariah compliant investment

Global leader in Shariah compliant unit trust

Market Cap

Sukuk

Total Islamic Assets(RM billion)

listed companies are Shariah compliant

74%market capitalisation of Shariah compliant

stocks

64%

Sukuk Islamic Unit Trust

market share of global sukuk

outstanding

54%market share

of global sukuk issuance

53%Net Asset

Value

RM52bShariah compliant unit trust funds

launched

193

2010 2011 2012 2013 2014 2015

70%72% 67% 67% 64% 64%

28% 30%33%

33% 36%36%

1,0531,160

1,4221,557 1,604

1,694

10.0% CAGR 2010 - 2015

USD5 billion

RM60 billion

RM1 billion

SGD600 million

USD800 million

RMB500 million (RM246 million)

7x oversubscribed, USD300 million

5.4x oversubscribed, RM1.8 billion

2x oversubscribed, USD600 million

RM125 million

USD500 million

RM800 million

RM30.6 billion

USD357.8 million

RM1 billion

6x oversubscribed, USD750 million

USD150 million

RM500 million

Malaysia is a Leader in Several Islamic Capital Initiatives

2015

2014

2013

2012

2011

2008

2007

2006

2005

2004

2002

2001

1990

Note:‘Emas’ is Malaysia’s designation for foreign currency denominated bonds and sukuk originating from Malaysia in the global capital market.

9

www.capitalmarketsmalaysia.com

Capital Markets MalaysiaUnit 14-6, Level 14, Wisma UOA Damansara II6 Changkat Semantan, 50490 Kuala Lumpur, Malaysia

Tel +603 2091 0667Fax +603 2091 0668

SOURCES

The various statistical and other information cited in this publication was gathered from international financial and economic institutions, national statistical offices and other publicly available industrial intelligence services. Principal sources for the Capital Markets Malaysia factsheet include Securities Commission Malaysia (SC), Bursa Malaysia, Bank Negara Malaysia (BNM), The World Federation of Exchanges (WFE), Malaysian External Trade Development Corporation (MATRADE), International Monetary Fund (IMF), World Bank Group and AsianBondsOnline (ADB).