KUALA LUMPUR, Jan 18 — Malaysia’s initial public offering (IPO) market remained active last year, led by quality issuers that sustained or exceeded their market capitalisation upon listing, supported by active investor participation, according to Deloitte.

In its South-east Asia IPO Capital Market 2023 Full Year Report, the professional services firm said Malaysia’s IPO market has remained vibrant with 32 listings in 2023 compared to 35 in 2022, while the IPO amount raised held steady at US$790 million (RM3.7 billion) and the IPO market capitalisation saw an increase of 18 per cent to US$2.99 billion.

"Generally, the total amount of funds raised remained above pre-Covid-19 levels, despite normalisation of interest rates and a rather downbeat economic outlook at the start of the year,” it said.

Deloitte Malaysia’s disruptive events advisory leader, Wong Kar Choon, said the listing requirements for the ACE Market are more accommodating towards companies with good growth propositions, and the lower ticket size of IPO offer shares continues to attract a steady flow of investor participation.

"We observed that, generally, IPOs with reasonable valuations generated strong interest from the market, and a good majority continue to demonstrate decent post-IPO share price performance.

"The capital market initiatives that have been announced have also boosted market vibrancy and enhanced investors’ access to the market. A formidable IPO pipeline is expected in 2024, buoyed by a healthy institutional and retail appetite, especially for consumer and tech or tech-related industries,” he said.

The report stated that IPO capital markets across South-east Asia saw 163 IPOs last year, which raised US$5.8 billion in funds and US$41.7 billion in market capitalisation in 2023.

It said that while the number of IPOs remained the same, there was a 24 per cent decrease in the total IPO amount raised from US$7.6 billion in 2022, while last year’s total IPO market capitalisation also fell 26 per cent from US$56.1 billion previously.

"The South-east Asian bourses maintained relative consistency, displaying resilience against challenging macroeconomic conditions. South-east Asian companies are thriving and have the ability to go beyond their shores for cross-border IPOs.

"This trend is fuelled by the anticipation of favourable valuations, enhanced liquidity, industry comparability, and investor familiarity with certain sectors,” it said.

Deloitte said stock exchanges across the globe are paying more attention to South-east Asian companies and are establishing new initiatives or revamping existing ones to improve their appeal as gateways to attract these high-growth businesses.

"Indonesia (62 per cent), Thailand (22 per cent) and Malaysia (14 per cent) are top of the table in South-east Asia for 2023, collectively accounting for 98 per cent of total IPO amount raised across the region. Indonesia saw approximately 53 per cent increase in IPO proceeds raised, while the other five bourses saw a drop in IPO proceeds,” it said.

Deloitte South-east Asia and Singapore disruptive events advisory leader Tay Hwee Ling said the challenge of sustaining a vibrant and attractive equities market is not unique to the South-east Asian region.

"Globally, the number of IPOs and IPO proceeds raised has normalised to pre-Covid-19 levels. This is driven by the trend of companies staying private for longer and, more recently, against the backdrop of a challenging global macroeconomic and interest rate environment.

"Companies considering possible public listings have several commercial objectives in mind. While the regional bourses can think of innovative ways to attract listing candidates, there are limits to how their measures can directly influence listing decisions,” she said.

Tay said that investors will ultimately determine how to allocate their capital based on their strategies and how they view the market.

"Governments recognise the value of an attractive equities market as part of the overall financial services ecosystem and must constantly adapt to the shifts in global capital markets,” she added. — Bernama