By NG MIN SHEN & ALIFAH ZAINUDDIN
The first listing on Bursa Malaysia Bhd’s newly launched Leading Entrepreneur Accelerator Platform (LEAP) which will trade shares of small and medium enterprises (SMEs), is expected by year-end.
Eleven SMEs have already engaged advisors for listing on Bursa Malaysia’s third market after the Main and ACE Markets.
Its CEO Datuk Seri Tajuddin Atan said two companies which are enroute to be listed on LEAP, are making the necessary financial preparation and comply with all the listings rules for the platform.
“As this is a new market, we want it to be populated with good, valuable companies led by the first few listings. If the initial listings are valuable, they provide credibility to the market,” Tajuddin said this on the sidelines of Invest Malaysia 2017 in Kuala Lumpur yesterday.
The companies which are seeking to be listed on the LEAP Market are Cloudaron Pte Ltd, Agrofresh International Group Sdn Bhd, Red Ideas Holdings Sdn Bhd, Polymer Link Sdn Bhd, Trustgate Bhd, Accent Wellness Global Sdn Bhd, East West One Group Sdn Bhd, Macfeam Sdn Bhd, Upstream Downstream Process & Services Sdn Bhd, ProEight Sdn Bhd and Safetyware Sdn Bhd.
LEAP Market was created to provide SMEs with an option for capital raising. Capital raising for small enterprises at times has been difficult as lenders imposed strict requirements.
SMEs account for 97% of business establishments in the country and contribute 37% to the country’s gross domestic product (GDP).
Tajuddin said the LEAP Market would act as an alternative capital raising platform for SMEs.
“It is designed to address the funding gap for SMEs and make it easier for them to take their businesses to the next level through raising funds in the capital market.
“The availability of such a platform would further aid the development of SMEs and support the broader economic activities,” he said.
Prime Minister Datuk Seri Mohd Najib Razak yesterday launched the LEAP Market and witnessed the exchange of memorandum of understanding (MoU) documents between Bursa Malaysia and its four strategic partners: Malaysia Digital Economy Corp, Malaysia Technology Development Corp, SME Corp Malaysia and Unit Peneraju Agenda Bumiputera.
Najib said the new market is in line with the government’s SME Masterplan to raise SMEs’ GDP contribution, employment and export volume.
Trading on LEAP will be limited to sophisticated investors — either high-net-worth individuals whose total assets or annual income exceed RM3 million or RM300,000 respectively, or corporates with net assets exceeding RM10 million.
Similar to the other two markets, listing will be guided by the framework issued by Bursa Malaysia and approved by the Securities Commission Malaysia. However, it is intended to ease the listing process for SMEs.
Companies that plan to list on LEAP are not required to issue a prospectus, and instead will only need to furnish an information memorandum. Bursa Malaysia will serve as the sole approving authority.
After listing, these firms will only need to produce semi-annual financial reports and audited annual accounts. These SMEs are not required to issue quarterly financial reports or annual reports.
The capital market is expected to inject up to 20% of SMEs’ financing needs from the present 96% by financial institutions.