Malaysia IPOs jump as economy improves and investors return

It is best-performing IPO market in region, with 28 listings in first 7 months of 2024

- Kang Wan Chern

An increasing number of firms are listing in Malaysia as the economy picks up and investors return to the stock market.

There were 28 initial public offerings (IPOs) on Bursa Malaysia in the first seven months of the year that raised RM3.4 billion (S$1 billion) all up, making the country the best performing IPO market in South-east Asia.

The bourse is aiming for 42 IPOS in 2024 compared with 32 in 2023, and despite a US$6 trillion (S$7.9 trillion) wipe-out in global stock markets on Aug 5, experts said that target can be achieved on the back of a stronger economy and ample liquidity in the stock market.

The exchange's Ace Market, which is designed for growth firms, has attracted 21 listings in 2024 while six joined the Main Market for more established companies, and one firm opted for the Leap Market, which is for accredited investors only.

Mr Raymond Chooi, regional head of equity capital markets at Maybank Investment Banking Group, noted that retail investors contributed to 13.2 per cent of the total funds raised during the period, with demand exceeding the shares available.

He added that most of the new listings in the Ace Market have recorded substantial gains in their post-listing share price.

Notably, two-thirds of the IPOS in 2024 were for companies with market values of below RM200 million. These registered an average return of 69.7 per cent within a week of listing, and many continued to trade well after the first week.

Examples include underground utilities engineer UUE Holdings, IT services company Go Hub Capital, and building support services provider KJTS Group.

This indicates "reasonable IPO valuations which are further supported by ample market liquidity", said Mr Wong Kar Choon, a partner at Deloitte Malaysia.