Malaysia’s IPOs shining in 2022

Oct 28, 2022 | News | 0 comments

KUALA LUMPUR: The country’s initial public offering (IPO) market is still vibrant with the healthy pipeline of companies looking to list either on Bursa Malaysia’s Main or ACE markets. Rakuten Trade head of equity sales Vincent Lau said the local IPO market remained vibrant as reflected by the number of IPOs thus far.

“The prospectus exposure continues to be very healthy. There are already 20 IPOs listed on the Main and ACE market this year. Based on the prospectus exposure (pipeline) remaining healthy, there are a few more listings before year-end, bringing the number closer to 30,” Lau said in an email interview with the New Straits Times.

He expects the number of IPOs to reach 30 by year-end, from a total of 20 listed on the Main and ACE markets so far this year.

“Overall, Bursa Malaysia’s IPO market has done quite well in terms of the number, with some major listings too.”Lau said technology, electronics manufacturing services (EMS), semiconductor and medical-related industries had done “very well” in terms of their listings.

These included SFP Tech Holdings Bhd, UMedic Group Bhd, Cnergenz Bhd, LGMS Bhd, Cengild Medical Bhd and Agmo Holdings Bhd.

“There will always be a demand for good companies when going for listing, and the oversubscription rate is a good indicator of that. Investment returns over the long term are positive for good fundamental companies,” he added.

Based on the prospectus exposure, Rakuten Trade expects the trend to continue into 2023.

“Malaysia’s gross domestic product (GDP) numbers remained robust, and the World Bank has also raised the GDP growth forecast to 6.4 per cent (previously 5.5 per cent).

“The rate hike will have no impact on companies seeking listing as they are tapping the equity market for a diversified funding base and investors rather than solely rely on bank borrowings,” Lau said.

He added that new listings would normally do well for the early years of listing as they were on the verge of the next phase of growth, hence going for IPO and moving from LEAP Market to ACE Market before progressing further to Main Market.

Meanwhile, Lau said foreign investors had been net buyers of Malaysian stocks with over RM7 billion year-todate.

“So far, the bulk of the listings are ACE Market, with a couple of Main Market listings. Foreign investors tend to look at bigger listings such as Farm Fresh Bhd,” he added.

By Farah Adilla