Listing Requirements on Bursa Malaysia
The gradual growth of any company would eventually to go public or towards the IPO (Initial Public Offering) path where you will be able to inject more funds into the company through the issuing of shares to the public. It is only natural that in order for the company to grow, additional capital and funds would be necessary to move forward or the company would pretty much be dormant after a while.
So what does it take for your company to obtain listing in Bursa Malaysia, the Malaysian bourse? First and foremost, you have to decide which market you would like to list in and this is very much influenced by the nature of your company and the products and services it offer.
There are 2 markets in Bursa Malaysia, the first being the Main Market which is the best and most common avenue for companies to raise funds. The Main Market is populated mainly by established companies and this is where you will find the largest companies in Malaysia like Malaysian Airlines, Air Asia, Petronas and the likes trading their shares there. On the other hand, the ACE Market provides an alternative sponsor-driven market and it is an ideal platform if you are a company with great potential development and growth. You will find that the ACE Market offers a great opportunity for companies which are growing to propel their business to higher ground in order to establish better financial standings in all business sectors. From here, it is only natural that the ACE Market Company continue to grow and eventually move into the Main Market.
A company that wants to apply into any of the market would have specific criteria that need to be met before it gets into public. In comparison, the requirements between listing in the Main and ACE Markets differ considerable much.
Basically, the most important factors of listing in Bursa Malaysia is to be able to prove that the company is growing positively and that it is ready to develop further.
To get listing in the Main Market, your company must provide a profit figure and uninterrupted profit after tax or PAT of 3 to 5 full financial years with an aggregate of a minimum of RM20 million and a minimum of RM6 million PAT in the latest full financial year. On top of that, the company must also fulfil the Market Capitalisation Test where there the company must be able to offer a minimum of RM500 million totals in market capitalisation once it goes public and incorporated and generated operating revenue of 1 full financial year before submission for listing. On top of that, the company must also provide details for the Infrastructure Project Corporation Test where it must show that it has the ability and right to construct an infrastructure project in or outside the country with a minimum of RM500 million in project cost.
On the other hand, if your company is planning to list in the ACE Market, there are no minimum operating track record or profit requirements needed.
Once the company goes public, both the markets would require the company to issue a minimum of 25% of the company’s share capital to the public. Main Market companies would require at least 1,000 public shareholders who must hold at least 1000 shares each while ACE Market companies would be required to have at least 200 public shareholders with at least 100 shares.
On top of that, there are also requirements for Bumiputera Equity where Main Market companies would need to allocate at best effort basis 50% of the public spread to investors who are of Bumiputera status. There are no such requirement for ACE Market companies upon initial listing. However, the companies are required to allocate at its best effort basis to allocated 12.5% of its enlarged issued and paid-up share capital to investors of Bumiputera status either within a year of achieving the profit track record of the Main Market or after 5 years of listing in the ACE Market whichever comes first. This Bumiptera Equity Requirements is applicable to all companies in Bursa Malaysia while exemptions are applied for companies which holds the BioNexus and MSC Malaysia statuses respectively. Companies with predominant foreign-based operations are also exempted from this requirement.
About Bursa Malaysia
First established in 1930 under the Singapore Stockbrockers’ Associatoin, the Malaysian branch re-registered in 1937 called the Malayan Stockbroker’s Association. It was until 1960 that the Malayan Stock Exchange was established which then started the public trading of shares and four years later saw the establishment of the Stock Exchange of Malaysia and then further changes was made for it to become the Stock Exchange of Malaysia and Singapore after Singapore left the country to form its own government.
With the cease of the interchangeability of the currency between Malaysia and Singapore in 1973, the stock exchange became further divided into the Kuala Lumpur Stock Exchange Berhad and the Stock Exchange of Singapore.
After that, in 1976, the Kuala Lumpur Stock Exchange Berhad took control of operations of the Kuala Lumpur Stock Exchange before the name was changed to Bursa Malaysia Berhad in 2004 and was listed in the Main Board of the Bursa Malaysia Securities Berhad in March 2005. Bursa Malaysia is he exchange holding company that operates the exchange, and related services in the stock exchange. Its subsidiaries include Bursa Malaysia Securities Bhd, Bursa Malaysia Derivatives Bhd, Bursa Malaysia Securities Clearing Sdn Bhd, Bursa Malaysia Derivatives Clearing Bhd, Bursa Malaysia Depository Nominees Sdn Bhd, Bursa Malaysia Securities Bhd, Labuan International Financial Exchange Inc., Bursa Malaysia Depository Sdn Bhd, Bursa Malaysia Information Sdn Bhd and Bursa Malaysia Bonds Sdn Bhd.
It remains as one of the biggest bourses in Asia, holding almost 1000 companies that offer all types of investment related services in the Main Board, Second Board and the MESDAQ Market.