KUALA LUMPUR: The ACE market has dominated this year's initial public offering (IPO) on Bursa Malaysia with 21 listings out of 28 in the first 10 months.
Deloitte Malaysia disruptive events advisory leader Wong Kar Choon said among the main reasons that pushed companies to opt for the ACE market is due to its pricing which is deemed more affordable and reasonable.
"The pricing enables a lot more market and retail participation and what we gathered is that most of the ACE market candidates are small and medium enterprises (SMEs).
"Although these companies have great profit track record, a lot of them prefers a sponsor, which is an investment banker, to provide guidance on their next step before going to the main market," he said during Deloitte's briefing on IPO landscape in Southeast Asia this year.
Bursa Malaysia saw 28 IPOs raising US$715 million in the first 10.5 months of this year.
Wong said Bursa had performed reasonably well, considering its target of 31 listings for the whole of 2023.
It is also notable that its IPO market capitalisation for 2023 to-date has already surpassed that of 2022.
"Malaysia's IPO market remains active, led by quality issuers that sustained or exceeded their market capitalisation upon listing, and supported by active 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 further have also boosted market vibrancy and enhanced investors' access into the market," he said.
Wong added there international companies are also showing interest on listing in Malaysia due to the "attractive price-earnings multiple"
"The double digit p/e multiple is a very attractive proposition. If these companies have a small presence in Malaysia and intend to grow, the p/e multiple is one of the key reasons that they consider," he added.
On the IPO outlook, Wong said 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.