Bursa Malaysia trims IPO target to 31 for 2023

PETALING JAYA: Lower-than-expected LEAP Market listings has led Bursa Malaysia Bhd to cut its initial public offering (IPO) target for 2023 by one-fifth, despite only reaffirming the initial target three months earlier.

The stock exchange operator narrowed the new target to 31 IPOs compared with 39 IPOs earlier.

Out of the 31 targeted IPOs, the bulk of them or 23 companies will be listed on the ACE Market, followed by seven on Main Market and one on LEAP Market.

Bursa Malaysia explained that LEAP Market listings were lower because companies were assessing the LEAP Transfer Framework before making a decision on their listing.

For comparison, there were 30 IPOs on the local bourse in 2021 and 35 in 2022.

“Barring any unforeseen circumstances, the exchange is optimistic in meeting the announced headline key performance indicators (KPI) for the financial year ending 2023 except for the number of IPOs,” it said in a filing.

It is notable that Bursa Malaysia’s IPO market capitalisation KPI for 2023 had already been achieved.

In a separate statement, Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the stock exchange operator would continue to foster a vibrant and sustainable capital market ecosystem.

The focus is to diversify fundraising and trading opportunities for Bursa Malaysia’s stakeholders, according to him.

“This entails future broadening of our product and service offerings, such as the commercialisation of a new debt fundraising solution for small and medium enterprises and the launch of Bursa Gold Dinar,” he said.

Bursa Malaysia reported yesterday that its net profit for the third quarter ended Sept 30 rose by 20.5% year-on-year (y-o-y) to RM60.41mil.

This lifted the earnings per share to 7.5 sen. Revenue for the three-month period also increased by 13.07% y-o-y to RM158.71mil.

Bursa Malaysia saw increased profits in the securities market and the data business in the third quarter ended Sept 30. However, profits from the derivatives market and the Islamic market fell in the same period.

On the securities market, Bursa Malaysia said operating revenue increased by almost 17% y-o-y to RM104mil, with the bulk of the turnover coming from trading revenue.

Trading revenue jumped by 26.2% y-o-y to RM70.4mil in the third quarter due to higher average daily trading value (ADV) for on-market trades (OMT) and direct business trades (DBT). Trading velocity in the latest third quarter was higher by six percentage points at 30% compared with 24% in the same quarter a year earlier.

Bursa Malaysia did not declare a dividend for the third quarter.

Cumulatively, for the first nine months of financial year 2023 (9M23), Bursa Malaysia posted a 8.6% y-o-y increase in net profit to RM192.83mil.

The stock exchange operator’s revenue, however, edged up marginally by 0.5% y-o-y to RM459.8mil.

The stronger bottom line was achieved on the back of lower operating expenses, led by a one-off reversal of provision.

For 9M23, the securities market registered a 3.3% y-o-y decrease in trading revenue, totalling to RM196.4mil.

This decline was due to lower ADV for the securities market’s OMT and DBT.

Additionally, listing and issuer services decreased by 8.3% y-o-y to RM47mil due to lower perusal and processing fees, as well as additional listing fees resulting from a decrease in the number of corporate exercises.

“As for the derivatives market, trading revenue fell by 8% y-o-y to RM67.5mil in 9M23 from RM73.4mil in 9M22, mainly due to lower collateral management fees earned, and fewer crude palm oil futures contracts traded.

“On the Islamic markets, Bursa Suq Al-Sila’s trading revenue grew by 8.8% y-o-y to RM12.9mil in 9M23, up from RM11.8mil in 9M22,” stated Bursa Malaysia.