Promotion of capital market: problem and prospects

Abstract

1. What Constitutes the Capital Market? For ease of treatment the capital market in Malaysia can be viewed as being divided into two component parts: the corporate securities market and the Government securities market. 2. The Government Securities Market The Government securities market is essentially a captive market. Funds mobilized through the issue of Government securities are used to finance development projects. All financial institutions, trusts, insurance companies, Socso, provident and pension funds, and the National Savings Bank are required, by law, to invest a portion of their funds in Government securities. In addition, certain profit making statutory bodies, public corporations and Petronas also invest their savings in Government securities. The yield on Government Securities is low but stable. As at the end of September 1987, total outstanding Government Securities are valued at around M$48 billion.