KUALA LUMPUR: Bursa Malaysia saw 30 new listings this year compared with 22 in 2018, the highest number since 2006 despite the challenging operating environment.
Of the 30 new listings, four were on the Main Market versus two in 2018,11 on the Ace Market (nine in 2018) and 15 were on the LEAP Market (11 in 2018).
Bursa Malaysia said Malaysian initial public offering (IPO) activities in 2019 had been healthy even during a period of market uncertainties, owing to the stable economic fundamentals, diverse and well-balanced market participants, as well as robust governance framework.
"Companies still find IPOs as a viable proposition for fund-raising exercise," the local exchange operator told Bernama via email recently.
According to Bursa Malaysia, year-to-date IPO funds raised and market capitalisation are RM1.97 billion and RM7.92 billion, respectively.
On the market performance, it said while the large market cap FBM KLCI stocks struggled with weak sentiment, there were pockets of opportunities in the overall local equity market, particularly in the small and mid-cap stocks.
"As at Dec 18,2019, the FBM Small Cap and FBM MidS Cap Indices both recorded year-to-date gains of 23.7 per cent and 30.7 per cent, respectively," it said.
On retail investor participation, it said as at end-October, the number stood at 26 per cent to total average daily value (ADV), the highest since 2014.
"The year also saw a nine per cent annual increase in new retail investors entering the market, ” it added.
With regard to foreign shareholding, Bursa Malaysia said it had remained fairly stable, in the range of 22.3-24.4 per cent over the last decade, despite the recent outflows, indicating continued long-term confidence of foreign institutional investors.
Hence, it anticipated the outlook for Malaysian IPO activities to remain positive in 2020.
On the exchange-traded funds (ETFs), Bursa Malaysia said there were six new ETFs listed on the local bourse in 2019, bringing the total of Bursa Malaysia listed ETFs to 16, up from 10 last year.
The six new ETFs comprise four of Malaysia's first leverage and inverse (L&I) exchange-traded funds (ETF) listed on Nov 29 -- namely, TradePlus NYSE FANG+ Daily (2x) Leveraged Tracker, TradePlus NYSE FANG+ Daily (-1x) Inverse Tracker, TradePlus HSCEI Daily (2x) Leveraged Tracker, and TradePlus HSCEI Daily (-1x) Inverse Tracker -- as well as two conventional ETFs.
The exchange operator attributed the better performance to the revised ETF guidelines by the Securities Commission that took effect in January this year.
"The revised ETF guidelines marked a new milestone and allowed a much wider range of ETF products on Bursa Malaysia for investors with varying risk appetites, leading to the inaugural listing of leveraged and inverse ETFs in November 2019," it said, adding that it expected at least the same number of new listings of ETFs in 2020.
Moving forward, Bursa Malaysia said as the local capital market continued to develop, investors’ proficiency on investment products was expected to become more sophisticated and eventually, they would begin to see ETFs as a good low-cost option to diversify their portfolio risk and income.
"The historical track records of ETF returns, despite recent global market volatility, will also be hard to ignore for investors who continuously seek ways to maximise their investment returns," it added. - Bernama
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