(Feb 5): Malaysia’s stock exchange will focus on larger initial public offerings (IPOs) this year as it looks to boost the pool and diversity of actively traded shares, the bourse chief said.
A priority for the bourse “is to build market vibrancy through various means, and one of that is by bringing larger IPOs to the market”, Datuk Fad’l Mohamed, the chief executive officer of Bursa Malaysia Bhd, said in an interview with Bloomberg TV’s Avril Hong.
“We are seeing a strong pipeline of bigger IPOs” on the back of steady foreign inflows and strong economic growth, he said in Kuala Lumpur on Thursday.
He expects some large listings to come through in the technology space this year and beyond, with “very strong” interest by foreign firms to list in Kuala Lumpur.
While the number of new listings remained robust, hitting 60 last year, most of the share sales involved companies with market capitalisation of less than RM1 billion. Malaysia has also seen the delisting of larger firms in recent years, including that of airport operator Malaysia Airports Holdings Bhd (MAHB) and plantation company FGV Holdings Bhd.
Malaysia’s strong domestic liquidity and institutional investor base will help anchor fundraising activities, giving local markets an advantage in attracting larger firms, Fad’l said.
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Strong foreign interest in the market will also bolster the country’s appeal. Malaysia was a big beneficiary of foreign diversification into Southeast Asia last year amid interest in the country’s data centers and advanced manufacturing, he said.
Global funds bought a net US$259 million ($329.88 million) of local shares on a net basis in January after three months of outflows. Foreign shareholding by market capitalisation improved to 19.2% last month from 19% in December, CIMB Securities said in a note this week.
Bursa will also continue to build on its derivative products to bring more high net-worth retail investors to the space. The bourse introduced futures product on the FBM KLCI index last month, which Fad’l said is gaining traction.
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