PETALING JAYA: As Bursa Malaysia seeks larger, higher-quality initial public offerings (IPOs) to meet its RM28bil market capitalisation target this year, market observers say execution, not ambition, will determine whether the exchange can deliver.
The target is slightly above the RM27.4bil raised from 60 IPOs in 2025, comprising 11 Main Market, 44 ACE Market and the remainder on the LEAP Market.
Under Datuk Muhamad Umar Swift, who led Bursa Malaysia from 2019, the exchange largely measured success by the number of IPOs.
This year, under the watch of new chief executive officer Datuk Fad’l Mohamed, who took the top post on March 1, 2025, the focus has shifted to market capitalisation, in line with the government’s push to prioritise larger listings while still supporting smaller companies.
The head of a local research firm said the shift is designed to attract higher-quality listings rather than smaller IPOs.
“Basically, it’s not about targeting the smaller IPOs as much, but about trying to get the quality IPOs in more,” he said.
He said the RM28bil target was achievable either through a handful of large listings or a combination of mid-sized offerings, noting that several sizeable IPOs are upcoming.
“There are a number of large IPOs in the pipeline. So, definitely it can be achieved,” he said.
So far this year, Bursa Malaysia has seen six IPOs – five on the ACE Market and one on the LEAP Market – contributing about RM773.93mil in market capitalisation based on IPO prices, or just 2.8% of the RM28bil target.
Poultry farmer Hock Soon Capital Bhd is set to be the first Main Market listing for the year on Feb 13, with an expected market capitalisation of RM300mil.
Other sizeable IPOs are also in the works.
Among names that have surfaced in the media are Sunway Bhd
’s spin-off of its healthcare arm, Sunway Healthcare Holdings Bhd, container shipping and logistics operator MTT Shipping and Logistics Bhd, and technology player SkyeChip Bhd, all of whom have filed draft prospectuses with the Securities Commission.
Despite the promising IPO pipeline, Tradeview Capital chief executive officer and founder Ng Zhu Hann said Bursa Malaysia’s RM28bil target is a “tall order”.
“In the past two years, Main Market listings have averaged about 10 a year. You may have a target, but whether the companies actually exist is another question,” he said, while acknowledging that the exchange is trying to make it easier for more companies to list.
Ng noted that the majority of IPOs continue to be on the ACE Market, which has supported small and medium enterprises and strengthened the ecosystem, but attracting investors to the smaller number of Main Market listings remains a challenge.
“Many past Main Market listings have underperformed compared with ACE Market companies. Some listings may be priced at peak valuations, which limits upside for investors.
“If investors cannot make money from a Main Market IPO, why would companies choose that route?” he said.
He added that the listing process itself can be a barrier.
Main Market IPOs involve more stringent entry criteria – including profit track or market capitalisation tests – and require coordination with the Securities Commission.
Whereas, since Jan 1, 2022, Bursa Malaysia has been the sole approving authority for ACE Market IPOs, acting as a one‑stop centre that consolidated functions previously split with the Securities Commission to streamline the process while maintaining investor protection standards.
Ng said that if the Main Market criteria are too stringent, companies may prefer to list on the ACE Market first and convert later, rather than going through the full Main Market process.
Ng also highlighted a stark valuation disparity between sectors, where traditional industries such as property, construction and oil and gas are often valued at low single-digit earnings multiples, while technology firms can command over 30 to 40 times earnings despite generating lower profits.
“This penalises traditional companies with sustainable earnings potential and discourages them from listing,” he said.
He added that regulators need to adopt a more open-minded approach, and a balanced market is crucial to attract larger, sustainable listings.
Against this backdrop, a spokesperson from investor relations and public relations firm Imej Jiwa Sdn Bhd suggested that Bursa Malaysia adopt a less protective market to promote competitiveness.
“(The local exchange should) adopt a less protective market to promote competitiveness, by reducing regulations which protect local companies, forcing the latter to compete,” he said.
He urged the exchange to ease the application process and minimise regulatory requirements, including a review of historical profit threshold requirements.
For context, companies seeking a Main Market listing under the profit track currently must show uninterrupted profits after tax for three to five years, with a minimum aggregate of RM20mil and at least RM6mil in the most recent year.
He also said listing costs, which are considered “relatively high” compared with other regional bourses, could be lowered to better align Bursa Malaysia with global exchanges.
“Not only can they emulate global bourses by offering tax allowances to lower the cost of listing, the allowances can be extended for additional few years after listing,” he added.
He also called for accelerated digitalisation of capital markets and questioned whether reporting of first-and third-quarter earnings could be made optional to further cut red tape.
Meanwhile, the head of trading at a local investment bank said Bursa Malaysia’s strategy of focusing on larger listings was sensible given global IPO conditions.
Still, he noted that the exchange faces several challenges, including global headwinds from geopolitical and economic uncertainties, competition from other regional exchanges, and the need for Malaysia to maintain clear policies and improve investor confidence to attract sizeable companies.
“The RM28bil target seems achievable, as it is only a circa 2% increase from 2025.
“The real test is whether they can deliver on quality over quantity,” he said.
On broader market trends, the research firm head noted that the local market has been “hot” and gaining momentum this year.
Yesterday, the FBM KLCI closed at 1,748.26 points, up by over 4% year-to-date.
“Those naturally would attract a lot of the IPOs to come into the market as well,”
“The momentum in the market indicates improved sentiment too,” he said, describing a virtuous cycle where rising confidence can help command higher valuations.
He warned, however, that external factors such as global economic and geopolitical developments could pose obstacles, while competition from regional exchanges, particularly Singapore’s SGX, may also influence listings.
“To successfully woo larger companies, the key factors are market conditions and the listing process itself,” he said, noting that clear procedures and favourable conditions are essential.
