Kuala Lumpur: The Securities Commission Malaysia (SC) expects the local capital market will see 30 new initial public offerings (IPOs) this year despite continued uncertainties domestically and globally.
Chairman Datuk Syed Zaid Albar said the capital market continues to be a key source of financing and IPO is still seen as a good way for companies to raise fund for the expansion of their businesses, as well as to improve their corporate standing.
“The Covid-19 outbreak and disruption on businesses affected fundraising activities, significant uncertainties still remain which will impact businesses decision to list.
“In 2020, despite a challenging period, the main market IPOs saw a 20 per cent growth and in 2021, we expect a healthy pipeline of around 30 IPOs,” he told a virtual media briefing.
According to the report, the SC received nine equity applications in 2020, of which three applications were for IPOs, which included a proposed secondary listing on the Main Market.
There were 19 new listings, of which two were on the Main Market, 10 on the ACE Market, and the remaining seven on the LEAP Market with a total market capitalisation of RM11.9 billion.
The total amount of funds raised from these new listings in 2020 was approximately RM2 billion.
The SC also registered 38 equity prospectuses in 2020, comprising 11 prospectuses for IPOs and 27 abridged prospectuses.
On the capital market outlook for 2021, Syed Zaid is optimistic that the global and Malaysian economies would be on the recovery path this year, given the progress of vaccines, the SC’s continued policy support and the overall resumption of economic activities.
Nevertheless, significant uncertainties still remain and overall recovery is expected to be gradual and uneven across all sectors.
“With that backdrop in mind, the SC will provide policy support in ensuring that the market remains resilient and orderly, and be a key funding source to revitalise the growth of the Malaysian economy in 2021.
“Our priorities will centre on the developments which we see within the industry and of course, the needs of our market participants.
“This includes facilitating the industry to further embrace digitisation that has been accelerated amidst the pandemic, facilitating greater fundraising for micro, small and medium enterprises and mid-tier companies which is crucial for the economic recovery,” he said.
Syed Zaid said the SC would continue its efforts to raise awareness and efficiency of the equity crowdfunding and peer-to-peer fundraising options among these target groups, facilitating the growth of sustainable and responsible investment (SRI), and leverage the Islamic capital market to further drive its SRI agenda.
He said the SC would also develop a SRI taxonomy for the capital market to complete Malaysia’s national agenda and transition to a low carbon economy.
Meanwhile, executive director of market and corporate supervision Kamaruddin Hashim said the issuances of corporate bond and sukuk for 2021 would likely be in the range of RM100 billion and RM110 billion.
“We see continued economic recovery, which are going to lead to increase private investment as business confidence increases, as well as the growth of government corporate bonds, in 2021 amidst the resumption of large infrastructure projects.
“Certainly, the present conducive financing landscape may also persuade issuers to raise their issuance at a much lower financing cost,” he said.
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