Listing your company on Bursa Malaysia requires the aid of professionals and an assessment of a company’s readiness and suitability. To achieve the latter, companies will be assessed against two benchmarks; the regulatory benchmark and the market benchmark.
To qualify for listing, every company needs to meet a set of prescribed rules under the Securities Commission Malaysia’s (SC) Equity Guidelines and Bursa Malaysia’s Listing Requirements. These set of prescribed rules are also known as the regulatory benchmark.
The regulatory benchmark is further divided into two sets of rules to determine whether a company is best suited for a Main Market listing or an ACE Market (previously known as Mesdaq Market) listing.
Furthermore, every company seeking listing will also be assessed using the market benchmark. Unlike regulatory benchmark, the market benchmark is purely driven by market expectations and has no prescribed set of rules.
Regulatory benchmark
The regulatory benchmark is a set of prescribed rules under the Securities Commission Malaysia’s (SC) Equity Guidelines and Bursa Malaysia’s Listing Requirements.
This benchmark is divided into two sets of rules to help companies determine if they are best suited for listing on the Main Market or a listing on the ACE Market.
Market benchmark
In addition to fulfilling the prescribed rules set out under the regulatory benchmark, companies seeking listing must also fulfil the requirements under the market benchmark.
It is important to note however that market benchmark has no prescribed set of rules and is purely driven by market expectations. Market expectations are the perceived (as opposed to actual) value of your company. This perceived value is derived from the prospects (attributes that are considered important to investors) of your company.
Attributes that affect a company’s prospects include:
- Financial performance when compared to other companies of similar business and operations
- Track record of promoters, directors and the company’s management
- Stage of development (i.e. industry’s business cycle)
- Position in the industry (i.e. market share)
These attributes however, are only four of many that are taken into consideration but at the very least lets a company gauge their “attractiveness” in the eyes of investors and potential advisers.
Listing process
Listing your company is a process that can take anywhere between seven months up to 12 months but may be shorter or longer depending on factors such as due diligence work, availability of the latest audited accounts, and the size and complexity of the IPO. Here are the steps involved:
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Post-listing
The journey to list your company on Bursa Malaysia is a long and often tedious one that must be aided by professionals such as investment bankers, property valuers, business and market researchers, and public relations managers that possess:
- Good IPO success rate
- Experience
- Reputation
- Distribution strength
- Commitment
But, your responsibility does not end upon successfully listing your company as public listed companies have certain continuing obligations that must be observed. These obligations include:
- Disclosure of information that may impact your company’s share price or the trading activities of your company’s shares
- Disclosure of corporate initiatives such as issuance of new shares or securities, entering into a joint venture agreement or merger, change in management, and more
- Response to queries from authorities regarding unusual price movements and trading activities
- Respond – be it to confirm, deny, or clarify – to rumours regarding your company and its operations after conducting thorough investigations
- Periodic financial reporting
- Maintaining the minimum public spread requirements
- Continuously disclose information on related party transactions and recurrent related party transactions
Being listed on Bursa Malaysia can open up opportunities for your company but it also opens it up to more scrutiny by other stakeholders such as investment communities, the media, and the general public. Therefore, compliance is of the utmost importance to ensure your company is and is continued to be perceived as being well-run, transparent, and committed towards building long-term value for its shareholders.
