Malaysian exchange expects better outlook on IPOs in 2019
Bursa Malaysia’s outgoing CEO is expecting the IPO market to improve in 2019 compared with the difficulties the market faced at the end of last year.
‘The IPO pipeline for this year, both in terms of numbers and size, will be much better than last year, and this includes main market listings,’ says Datuk Seri Tajuddin Atan in a statement unveiling the Kuala Lumpur stock market’s financial results for 2018.
‘The power of the market is mostly due to the power of perception, not facts. What is inherent at this point in time is that other markets are not hosting as many IPOs, either,’ adds Tajuddin, who leaves his post next month..
He also notes there were more approvals for IPOs last year but it was the companies themselves that decided to hold back on their listing plans.
‘Businesses would hold back expansion plans when market perception was not so good,’ he explains. ‘This year, we have already seen four listings: two in the [main] ACE market and another two in [the Leading Entrepreneur Accelerator Platform]. And some of those that have already got their approval from last year will actually come back this year.’
But Tajuddin acknowledges that the final quarter of 2018 was a tough one: ‘It was a challenging quarter for us. Cost is something I have always deemed important – not just cutting costs, but also about how we spend, the incoming revenue. So the cost-to-income ratio is something I look closely at and we do manage our variable costs quite seriously.’
The stock exchange’s fourth-quarter profit to end of December 2018 fell 6.2 percent to RM51.86 mn ($12.7 mn) from the previous year’s corresponding quarter, with revenue falling 8.7 percent to RM128.92 mn.
For its full year to the end of December, Bursa Malaysia recorded a marginal rise in profit to RM224.04 mn, compared with a profit of RM223.04 mn in 2017. Revenue dipped to RM550 mn in 2018 from RM556.83 mn in 2017.
Malaysia is currently the premier center for the world’s global Islamic economy – thanks to its dominant Islamic finance ecosystem – but the United Arab Emirates is hot on its heels challenging that position, according to the Dubai Islamic Economy Development Centre’s State of the Global Islamic Economy Report 2018/19.