KUALA LUMPUR: Bursa Malaysia Bhd is experiencing a resurgence in initial public offerings (IPOs) as 2024 draws to a close, reflecting renewed investor confidence in the local bourse.
With 44 IPOs to date, Bursa Malaysia has outpaced other regional markets in Southeast Asia, emerging as an attractive IPO destination amid a stable economic and political landscape.
According to Mohd Sedek Jantan, UOB Kay Hian Wealth Advisors' head of investment research, several factors have contributed to this surge. "The risk of doing business in the fourth quarter has subsided as major economic and political uncertainties have passed, such as the US presidential election while Malaysia's active role in international forums has bolstered the country's global standing," he told Bernama.
He reckons that Malaysia's stable economic indicators, including positive trade figures, healthy employment rates and steady industrial production have fostered a predictable business environment that encourages IPO activity. "Political stability and a clear government policy framework further enhance investor confidence," he said.
Regional market IPOs
The surge in IPOs on Bursa Malaysia underscores the local bourse's resilience compared to other regional markets.
Mohd Sedek noted that Malaysia has recorded 36 IPOs so far this year, raising about US$450 million in the first half alone, which accounts for 33 per cent of Southeast Asia's total IPO proceeds.
"This stands in contrast to a subdued IPO market across the Asia-Pacific, where proceeds have dropped by 63 per cent, largely due to challenges in China and Hong Kong.
"Malaysia has outperformed both Indonesia and Singapore in IPO activity this year," he pointed out, highlighting that Indonesia faces political uncertainty following its recent presidential election, while Singapore has seen a slowdown in activity due to high regulatory costs and weak investor demand.
In contrast, he said Malaysia's IPO market benefits from a stable macroeconomic backdrop, business-friendly regulations, and the supportive MADANI Economy Framework.
Mohd Sedek said the growth in IPOs reflects optimism in key Malaysian sectors, with recent listings from the construction, manufacturing, and healthcare industries.
He said in the construction sector, which expanded by 22.9 per cent in the third quarter, private and public investments in residential, non-residential, and large-scale infrastructure projects are expected to drive further growth. "Key government initiatives, such as RM9 billion for private finance initiatives and RM25.5 billion from government-linked investment companies are expected to sustain this momentum," he added.
In the manufacturing sector, Malaysia's transformation under the New Industrial Master Plan 2030 aims to drive growth in high-value, technology-driven industries. "The government's focus on digitalisation, green technology, and advanced manufacturing techniques is expected to attract further investments, solidifying Malaysia's position as a competitive manufacturing hub in ASEAN," he said.
Malaysia's healthcare sector is also expanding due to demographic shifts and rising health awareness. The integration of technology, such as telemedicine and digital health solutions, is anticipated to boost the sector's growth by improving care accessibility and efficiency. "This trend, coupled with government support for medical tourism, positions Malaysia as a key player in the healthcare industry in the region," Mohd Sedek said.
Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift expressed satisfaction with the IPO momentum, noting that three Main Market IPOs were listed this week alone.
"This surge reflects a thriving capital market with strong regulatory support and a diverse investor pool. Malaysia has experienced a bull run, making us the ASEAN exchange with the highest number of IPOs to date this year," he said.
Echoing this sentiment, the exchange regulator's chairman Tan Sri Abdul Wahid Omar highlighted the significance of Monday's listings, which took place on the auspicious date of 11.11. (Nov 11)
"Both companies chose that date for its auspicious nature, marking a rare occasion of two listings on the same day. The last time Bursa hosted two listings on a single day was in November 2017, following the demerger of Sime Darby Group, which saw both Sime Darby Plantation Bhd and Sime Darby Property Bhd debut together," he said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the strong IPO pipeline signals positive prospects for the Malaysian economy, as stable policies and a clear path towards becoming a high-income nation attract investor interest.
"Malaysia's equities are undervalued, offering upside potential. The economic and policy stability enhances investor confidence, while companies' growth trajectories inspire optimism for the market's future," he said.
Mohd Afzanizam said that as Bursa Malaysia continues to attract IPOs, he expects the exchange's momentum to inspire small and medium enterprises to pursue similar growth opportunities. "The record-setting IPO activity underscores Malaysia's resilience and strong capital market position in ASEAN, providing a positive outlook for 2025," he added.