Listing momentum seen continuing into 2022

Of the 25 listings up until now, Malaysia has had four Main Market IPOs, followed by 11 in the ACE Market and the remainder in the LEAP Market.

KUALA LUMPUR: Given the higher number of initial public offerings (IPOs) on Bursa Malaysia this year, Deloitte Malaysia foresees a continuous momentum of listings next year as economic recovery gets underway.

Deloitte Malaysia IPO leader Wong Kar Choon said there are some potential IPOs next year, adding that the firm still received enquiries on IPOs from its clients.

“Based on what we know in the market and how busy we are (with clients), I feel very bullish about IPO listings in the coming year.

“The number of positive Covid-19 cases are declining and coupled with the additional booster vaccination shots, these provide confidence to the capital market,” he said during the Deloitte TaxMax webinar yesterday.

Wong said Malaysia saw a higher number of IPO listings this year, totalling 25 year-to-date from 19 listings last year, bolstered by the drive in vaccination rates and the reopening of the economy.

Deloitte Malaysia IPO leader Wong Kar Choon said there are some potential IPOs next year, adding that the firm still received enquiries on IPOs from its clients.

“Despite it being the second year of the pandemic, fund raising has not stopped. Companies have continued to attract investments through mergers and acquisitions as well as IPOs.

“There is still continuous support of retail investors in the market,” he said.

Of the 25 listings up until now, Malaysia has had four Main Market IPOs, followed by 11 in the ACE Market and the remainder in the LEAP Market.

Wong pointed out that proceeds raised from the IPOs were lower at RM789mil from RM1.9bil last year mainly due to MR DIY Group (M) Bhd’s listing that raised RM1.5bil the year before.

The proceeds raised made MR DIY Group’s IPO the largest in three years and the only listing to surpass the billion-ringgit threshold last year.

“In 2021, there was no such big IPO. However, CTOS Digital Bhd (which was listed this year) also did an outright offer of sale of RM990mil plus the RM200mil from the public funds raised, making it an impressive RM1.2bil deal, especially in the pandemic year,” he said.

Interestingly, Wong said, there is an increase in the number of real estate sector listings in the country this year compared to a year ago as a result of the economic recovery from the Covid-19 pandemic.

He added that property technology firms would gather an attractive IPO listing in Malaysia, noting that property tech listings in other countries have been appealing to retail and cornerstone investors.

“The capital market in Malaysia continues to be vibrant, supported by both retail and cornerstone investors.

“They are interested in particularly certain type of businesses that have technology and digital outreach.

“They will look out for outfits that disrupt conventional businesses,” Wong noted.

It is also worth noting that price-to-earnings ratio of tech companies tends to be higher than conventional businesses, he said.

With the government’s proposal to remove the RM200 stamp duty on contract notes for the trading of listed shares and increasing the rate to 0.15%, Deloitte Malaysia business tax executive director Choy Mei Won said this would make it more expensive to buy and sell shares.

“It would impact intraday traders, given their high frequency of buying and selling transactions.

“Following the move, potentially a marginal percentage of intraday traders may be attracted to trade in other financial hubs such as Singapore and Hong Kong,” said Choy.