Healthy IPO pipeline on Bursa Malaysia

BURSA Malaysia recorded 35 listings in 2022, which is more than the 30 achieved in 2021.

Despite the global business climate, these listings have brought market capitalisation of RM10.05bil to the local bourse.

Going forward, Bursa Malaysia would like to see more listings on the main market; more companies are also expected to be listed on the LEAP Market for small companies.

There is an incentive for small companies to be listed on the LEAP Market, as the LEAP transfer framework is expected to be in place for companies on the LEAP Market to graduate to the ACE Market.

Among the listings in 2022, three had a market capitalisation of more than RM1bil – Senheng New Retail Bhd (RM1.60bil); Farm Fresh Bhd (RM2.51bil) and ITMAX System Bhd (RM1.43bil).

“We have a healthy pipeline for 2023, which shows that Bursa Malaysia is still a good and attractive fund-raising destination.

“We had strong growth in initial public offerings (IPOs) in 2022 where we welcomed 35 new companies to the exchange.

“This momentum is expected to continue into 2023 with seven companies – one on the Main Market and six on the ACE Market – having confirmed their listings by the end of January 2023,’’ said Bursa Malaysia, adding that foreign inflows remained strong.

Since the Covid-19 pandemic, Bursa Malaysia continues to be a preferred listing destination for companies.

There have been 64 successful initial public offerings (IPOs) from 2021 up to November 2022.

Despite the pandemic outbreak, 19 companies had successfully listed in 2020.

Steady growth

Total funds raised from IPOs had increased steadily over the past three years from RM2bil in 2020, to RM2.75bil in 2021, and RM3.15bil up to November 2022.

Within the region, Bursa Malaysia remains as one of the top regional exchanges in Asean with the second highest number of IPOs for 2022, after Indonesia.

While there is more to be done, Bursa Malaysia views the IPO performance for 2022 to be satisfactory, given the higher number of IPOs and total funds raised compared to the previous years.

“We have seen many listings on the ACE Market and desire to see more on the main market as this is where global fund managers participate,’’ it added.

Bursa Malaysia will continue to focus its efforts to achieve a vibrant ecosystem which is critical in attracting potential issuers and ensure ample liquidity in the market.

Initiatives towards this end include system enhancements as well as conducting of dialogues with various stakeholders to push for efficiencies that can improve market competitiveness, liquidity and the profiles of public-listed companies.

Ongoing dialogues are also conducted between various participants within the capital market, market intermediaries and government authorities to improve Malaysia’s attractiveness as a listing destination for technology, halal, healthcare and environmental, social and governance (ESG)-related companies.

Bursa Malaysia is targeting to release the LEAP transfer framework by the first half of 2023, which will likely increase the number of IPOs in the LEAP Market in the coming years, as these companies will have a clearer view of how they can graduate to the ACE Market.

Platform for SMEs

The LEAP Market is a platform for small and medium enterprises that want to seek more funds but have not met the requirements for listing on the ACE Market.

The new LEAP transfer framework for the transfer of listings from the LEAP Market to the ACE Market was proposed as companies listed on the LEAP Market had grown in terms of size and profitability to qualify for entry into the ACE Market.

Companies that qualify will graduate from the LEAP Market, which is accessible only to sophisticated investors, to a more robust listing environment on the ACE Market, where trading is open to the public.

On why some IPOs have gone to other bourses, Bursa Malaysia said: “Companies seeking to list on other bourses typically have specific objectives such as to achieve a higher valuation and tap better liquidity.

“Bursa Malaysia is highly liquid and serves as an efficient platform for companies to raise capital especially companies involved in sectors that exist within our economy, that investors are familiar with.

“Hence, we will always see a continuous pipeline of companies that Bursa Malaysia can serve – companies needing capital and investors who provide the capital.

“Only a small number of companies would list in other markets.’’

In terms of regulatory framework, timing and investor support, the domestic market is more than sufficient to support domestic IPOs.

Bursa Malaysia is already an established home for foreign investments, as seen in the significant inflow of RM5.7bil in foreign capital, as at the end of November, 2022.

“Nonetheless, Bursa Malaysia continuously strives to improve the capital market ecosystem by addressing impediments, as well as benchmarking our requirements with other markets to ensure that we remain competitive and attractive to potential issuers,’’ it said.

Against this optimism from Bursa Malaysia, all other hands should clap in unison to provide the support, political stability, social harmony and strong governance – factors that give confidence to investors.

Yap Leng Kuen is a former StarBiz editor. The views expressed here are the writer’s own.

Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Next In Business News

A bump on the road
Workplace stress and anxiety
MAHB to ‘clean house’ at Malaysia airports
Ringgit to recover on investor confidence
Is the ringgit weakness permanent?
How to correct global imbalances?
Expansion of M’sian builders overseas – strategy and necessity
Private sector can drive Malaysia’s green goals
Are we targeting subsidies right?
Easing residential overhang

Others Also Read