Pandemic challenges Bursa on hitting 30 IPOs

There might be some hurdles for companies to show interest in IPOs this year, says expert


IT MAY be a challenge for Bursa Malaysia to see 30 companies making its debut on the exchange this year due to the economic downturn that has affected many companies during the pandemic.

Although the Securities Commission Malaysia (SC) announced that it is expecting 30 companies to list this year, Malacca Securities Sdn Bhd head of research Loui Low said there might be some hurdles for companies to show interest in IPOs this year.

“It is challenging as most of the companies have been going through downsizing,” he told The Malaysian Reserve recently.

Despite the situation, some companies that have stayed resilient during the pandemic may opt for a listing and drive the numbers as anticipated by the SC.

“As there will be companies that have performed well during the pandemic, they will be a candidate for IPO listing,” he added.

SC chairman Datuk Syed Zaid Syed Jaffar Albar recently described the IPO projection as a “healthy” figure as there were only 19 new listings last year, including two new companies on the Main Market.

Based on Bursa Malaysia’s website, there were 30 new listings in 2019 consisting of four on the Main Market, 11 on the ACE Market and 15 on the LEAP (Leading Entrepreneur Accelerator Platform) Market.

In 2018, 22 companies debuted on Bursa where two were on the Main Market, while the ACE Market and LEAP Market recorded nine and 11 listings respectively.

To date, there have been five IPOs where three companies were listed on the ACE Market, namely HPP Holdings Bhd, Mobilia Holdings Bhd and Teladan Setia Group Bhd. Meanwhile, Jishan Bhd and UCI Resources Bhd made their debut on the LEAP Market.

Two more companies are awaiting their IPOs namely Flexidynamic Holdings Bhd, which is slated to list on March 30, and Volcano Bhd, scheduled to have its IPO on April 6.

Recently, Flexidynamic saw its IPO’s public portion of 14.2 million shares at 20 sen per piece oversubscribed by 155.7 times. In a Bursa filing recently, the group said it received a total of 23,466 applicants for 2.22 billion new shares with a value of RM444.94 million. The group also aims to raise up to RM15.05 million in proceeds upon its listing.

As for Volcano, it has a public issue of 25 million shares and an offer for sale of 35 million shares at an issue price of 35 sen per share. It aims to raise RM8.75 million from its IPO.