Bursa Malaysia targets 39 listings in 2023 with total proceeds to surpass RM3 bil
KUALA LUMPUR (Jan 4): Bursa Malaysia Bhd is expecting 39 companies to launch their initial public offerings (IPOs) on the exchange this year to raise proceeds of more than RM3 billion.
According to Bursa Malaysia’s CEO Datuk Muhamad Umar Swift, most of the new listings will be concentrated in the ACE market, compared to the Main Market and the LEAP market, due to flexible requirements of ACE market.
“There is a lot of liquidity, the market is generally strong and that will balance the year. But of course all these will have to be backed by investors’ sentiment.
“We are expecting the funds raised this year to be greater than 2022,” said Muhammad Umar at the sideline of the signing ceremony on Wednesday (Jan 4) between Bursa Malaysia and the Department of Statistics Malaysia (DOSM) to share macroeconomic data to further develop the capital market.
Up until last November, Bursa Malaysia recorded 35 listings with total proceeds of RM3.15 billion and a total market capitalisation of over RM10 billion.
The two large cap companies listed on the Main Market were Senheng New Retail Bhd, which saw a market capitalisation of close to RM1.61 billion at the time of listing, while Khazanah Nasional Bhd’s-backed Farm Fresh Bhd was valued at close to RM2.51 billion.
Bursa Malaysia recorded a total of 29 company listings for the year of 2021, with a total market capitalisation of RM8.26 billion. These IPOs raised a total of RM2.75 billion.
“It is all driven by the needs and wants of corporations. As companies come out of the pandemic, the profits have been impacted. They want to show a strong profits and growth story,” said Muhammad Umar.
He added that Malaysia as a trading country is impacted by exogenous factors, particularly by the US Federal Reserve’s interest rate decisions.
“If there is a lot of conversation about the world economy being in recession, then you will see the easing of the Fed’s interest rates, which will bode well for the market,” he added.
The current US Federal Reserve interest rate, or federal funds rate, is 4.25% to 4.50% as of Dec 14, 2022.
In the home front, Bank Negara Malaysia (BNM)’s Overnight Policy Rate (OPR) stands at 2.75% after four consecutive hikes of 25bps, from 1.75% in the beginning of 2022.
Research firms predict the central bank to raise OPR to the pre-pandemic level of 3.25% this year.
He added that the exchange remains committed to increasing Bursa’s vibrancy among issuers, including those seeking listing in US’ electronic stock exchange Nasdaq, which has a reputation for listing fast-growth technology businesses.
“You have to look at why these big companies look outside of Malaysia for listing. We have big markets but perhaps they have superior prices. For example, we saw a number of tech listings in the past go to Nasdaq. They have not fared so well, and institutional investors in Malaysia were not looking to pay those prices.
“The purpose of the exchange is to allow companies to raise capital. As long as we are doing that, we are fulfilling our purpose,” he added.
Malaysian companies that have indicated interest to list on Nasdaq include Carsome, Capital A Bhd, ARB IoT Group Ltd, Evoair Holdings, Graphjet Technology Sdn Bhd, and wellness company Agape.
Shares of Bursa Malaysia closed one sen higher to RM6.63 on Wednesday, giving the exchange a market capitalisation of RM5.37 billion.