PETALING JAYA: Bursa Malaysia Bhd aims to attract more companies from Sabah and Sarawak to list on its exchange by organising initial public offering (IPO) workshops, seminars as well as networking in the two regions, driven by their potential to penetrate the environmental, social and corporate governance (ESG) capital market.
As at Dec 30, 2022, Sabah recorded one and nine listed companies on the ACE Market and the Main Market respectively, with a total market capitalisation (market cap) of RM4.72 billion.
Sarawak recorded one and 35 listed companies on the LEAP Market and the Main Market respectively, registering a market cap of RM17.85 billion. Sabah and Sarawak combined have a total of 46 companies and a market cap of RM22.57 billion on the exchange.
Bursa Malaysia remarked that well-performing East Malaysian companies could potentially enter ESG capital market.
“We believe that there are many good companies in Sabah and Sarawak with the potential to address the green economy while also satisfying the capital market’s demand for ESG-related businesses,” it told SunBiz.
The bourse operator said it intends to create more awareness to companies on the benefits of listing on the exchange via group forums that reach a wider audience as it believes that it is an opportune time.
“We achieve this through jointly organising relevant events such as initial public offering workshops or seminars with identified partners, as well as leveraging on events organised by third parties to share the key aspects of IPO to their network members. We had collaborated with one of our partners for an IPO event in Kota Kinabalu recently and we intend to organise more such events in both Sabah and Sarawak,” said Bursa Malaysia.
In addition, the exchange shared that it is always keen to create awareness among companies across the country on opportunities to raise funds via the equity capital market.
Bursa Malaysia said that by listing on the exchange, East Malaysia-based companies will benefit from having access to the capital market to raise funds to facilitate growth as well as enhance its credibility and investibility, as there will be higher levels of transparency and corporate governance practices.
“Listed companies have the opportunity to raise their corporate profile, awareness of the company’s products and services as well as overall business performance as they typically receive greater media coverage, and which is advantageous for the company to conduct its business,” it said.
The bourse advised interested Sabah and Sarawak-based companies to address – before pursuing a listing – the market segment they categorise themselves in, which is dependent on various factors, such as the company’s size, performance, growth prospects and stage/business cycle.
Bursa Malaysia does not have any particular industry or segment target for East Malaysia-based companies and is open to any suitable industry or industry segment the latter is interested to explore on its exchange.
Currently, the bourse said, there are no specific incentives for companies based in Sabah and Sarawak to list. However, based on Budget 2023 tabled in October 2022, listings of eligible technology-based companies for years of assessment 2023 to 2025 on the Main, ACE and LEAP markets are eligible for a tax deduction of up to RM1.5 million on the listing costs of fees to authorities, professional fees as well as underwriting, placement and brokerage expenses.
Year to date, the bourse has recorded six listings. one on the Main Market and five on the ACE Market.
Last year, Bursa Malaysia recorded an increase of 16.67% to 35 IPOs compared with 30 in 2021, which brought in RM11.15 billion market capitalisation with ACE Market peaking at 25 since its inception, following the reopening of the economy as more recovered companies sought listings.
The bourse expects the upward trend to continue in 2023. Three of the listings had a market cap of more than RM1 billion and 26 were priced above their IPO price.
Previously, Bursa Malaysia told SunBiz that it has a healthy pipeline for 2023.
“We are targeting to release the LEAP transfer framework by (the first half of 2023) H1’23, which we believe would increase the number of IPO in the LEAP Market as these companies will have a clearer view of how they can graduate to the ACE Market. We believe this momentum will continue into 2023, driven primarily by the implementation of Bursa Malaysia as the one-stop centre for all ACE Market listings, together with the upcoming launch of the LEAP transfer framework,” it said.