KUALA LUMPUR: Bursa Malaysia Bhd is cautiously optimistic that it will be able to achieve the goal of 42 initial public offerings in 2024 with the pace picking up in the second quarter of the year, said its vice-president of IPO marketing, Muhd Farrish Ishak.
“Funds raised from IPOs have greatly increased over the years from RM2 billion in 2019 to RM3.6 billion last year. Due to the pandemic in 2020, we saw steady numbers of 30 IPOs from 2018 to 2023. But as of April 2024, we have already seen 13 IPOs coming into the market,” he added.
Disclosing this at the Malaysian SME National Conference organised by KSI Strategic Institute for Asia Pacific today, Farrish said IPOs come from various sectors, from healthcare to technology, showcasing the diversity of the Malaysian economy.
“An IPO comes into play when a company has reached a certain level of maturity. It is a significant milestone that provides access to a large pool of public capital, but it also comes with increased scrutiny and regulatory requirements,” he added.
An overview of the market done by Bursa Malaysia has witnessed a steady increase in IPOs from 2019. In 2022, the market saw the highest number of IPOs since 2006.
Bursa Malaysia operates the Main Market, ACE Market and LEAP Market, which are designed to meet the needs of different types of companies.
Farrish said LEAP is designed for small and nedium enterprises to access public funding more cost effectively and efficiently. The need for SMEs to consider an IPO is believed to be a need, as this will be used as an access to the capital and a growth facilitator.
“The capital can be used for finance expansion plans, research and development and strategic initiatives. Going public and unlocking numerous opportunities for SMEs can increase access to capital and improve financial visibility,” he added.
He said that three SME companies that are listed on the ACE market have been transferred to the Main Market with a total of RM697 million released from these IPOs. The market capitalisation upon the listing of these SMEs reached an impressive RM3 billion.
“At the end of April 2024, these three companies’ market capitalisation had gone up over twofold, reaching a total market capitalisation of RM6.5 billion. These numbers are reflections of commitment to fostering a conducive environment for the growth of SMEs in Malaysia,” Farrish said.
