Bursa Malaysia remains resilient despite lockdown

The sentiment comes amid new companies listing successfully during this period with more in the pipeline

by LYDIA NATHAN / Pic by BLOOMBERG

THE local stock exchange is still considered an attractive destination for investors despite the lockdown that has been extended until June 28.

Rakuten Trade Sdn Bhd head of equity sales Vincent Lau said Bursa Malaysia Securities Bhd remains a vibrant market, with new companies listing successfully during this period and more in the pipeline.

According to Lau, the thematics of economic recovery support investors interest, while the vaccination programme rollout is expected to help keep the local equity market resilient in the coming months.

This follows the move by Australian Securities Exchange-listed (ASX) OM Holdings Ltd seeking a second listing on Bursa Malaysia.

OM Holdings has been publicly traded since 1998 on the ASX, and this exercise will be the first cross-listing between the two stock exchanges.

OM Holdings is a vertically integrated manganese and ferro alloy producer. Its upstream operations involve exploration and mining of manganese ore, and downstream activities include smelting and trading of manganese ore and processed ferroalloys.

The company has captured value across the entire process chain through operations in Australia, China, Japan, Malaysia, Singapore and South Africa.

Lau said the move to get a secondary listing was a good next step and made sense for OM Holdings to allow shareholders to trade shares between both markets.

OM Holdings executive chairman Low Ngee Tong said the second listing will be undertaken by way of introduction and will not involve the issuance of new shares, with its tentative listing date set for June 22.

“Secondary listings such as this are beneficial for companies, it is definitely attractive for companies that want the exposure and more attention on them. This allows better profiling and direct access to Malaysians,” he said.

Low said because its shares are fully fungible between both stock exchanges, shareholders can transfer shares to either for trading.

Shareholders will be able to commence the process of removing shares from Australia to the Malaysian register through the submission of a register removal request with OM Holdings’ Australian share registrar, Computershare Investor Services Pte Ltd.

“Through the secondary listing, we aim to broaden our investor reach and widen our investor base, and potentially increase the liquidity of our shares through separate trading platforms.

“It will enable us to tap into additional platforms for future fundraising and provide us with the flexibility to access different equity markets to raise funds.

“We may potentially undertake fundraising from the Malaysian capital markets after the secondary listing and channel the funds towards expanding our Sarawak plant,” Low said during the virtual press conference last Friday.

OM Holdings’ manganese ore mining operations are based in the Bootu Creek Mine in the Northern Territory, Australia.

The company also owns a 13% effective stake in the Tshipi Borwa manganese mine in South Africa.

“The ferro alloy smelters and manganese sintering facilities in Sarawak, Malaysia, cost RM2.05 billion and we have pivoted the focus back to Asia and (the reason) we are listing on Bursa Malaysia,” Low noted.

Lau said as Covid-19 cases see gradual downtrend, the rebound in the global economy will unlock pent-up demand for the company’s products.