Before you can be listed on the Malaysia stock exchange, you need to determine the suitability of your company to be listed on the stock exchange. There are several key considerations which must be taken into account before a company can be listed on Bursa Malaysia, and requirements which must be met.
Bursa Malaysia Berhad (Bursa Malaysia) is the regulating authority and operator of the only stock exchange in Malaysia. Previously known as the Kuala Lumpur Stock Exchange, Bursa Malaysia offers an array of exchange-related services in Malaysia. If you want to list your company on the Malaysia stock exchange, this guide will show you just what you need to do.
Before you can be listed on the Malaysia stock exchange, your business must first be registered with the Companies Commission of Malaysia (SSM). Once your business is trading on the stock exchange, it is officially considered a listed company in Malaysia.
What Does It Mean to Have My Business Listed on the Stock Exchange?
By listing your company on the stock exchange, you are in effect allowing the shares of your company to be publicly traded. Which means that these shares can be bought or sold by any investor, including the existing shareholders of the company.
Listing your company on the stock exchange means being able to see just what the known market value of the company is. Each share will have a value or reference price which comes with it, and by creating a public market for your shares, you can unlock the value of your company.
Why List Your Company on the Malaysia Stock Exchange?
For a company in Malaysia, having a successful IPO (initial public offering) and being listed on the stock exchange can be a very important step towards meeting its long-term business goals and aspirations for success.
The reasons for any company or business in Malaysia to list on the stock exchange will vary according to the company’s goals. Among some of the most common reasons a company chooses to list itself on the stock exchange include:
- To raise more capital for better growth opportunities
- Enhancing the profile and credibility of the company
- Encouraging and rewarding local employees through the employee equity scheme
- Allowing current shareholders of the company to realise their investments
- To facilitate growth
- To widen the shareholder or investor base
No matter what your reason may be, listing on the Malaysia stock exchange (or any stock exchange for that matter) marks a very significant milestone in your entrepreneurship journey so far.
When making the decision whether your business in Malaysia should be listed on the stock exchange, there are two very important questions that you need to ask yourself:
- What is the benefit of listing your company?
- Is your company suitable for the stock exchange?
How Do I Determine If My Company Is Suitable for the Malaysian Stock Exchange?
There are two ways to determine the suitability of your company to be listed on the stock exchange, which is through the Regulatory Benchmark and the Market Benchmark.
The Regulatory Benchmark consists of a prescribed set of which have been laid out by the Securities Commission Malaysia (SC)’s Equity Guidelines and the Bursa Malaysia’s Listing Requirements. These rules make it easier for you to determine how eligible your company is and whether your business is better suited to the:
- Main Market – Suitable for businesses with a profit track record of 3-5 full financial years, or companies with sizeable businesses. Your business should have the following attributes to be listed on this market:
- Strong business prospects
- A healthy financial position
- Good company management with qualified individuals who come with experience
- An identifiable core business
- No conflict of interest
- Good corporate governance
- ACE Market – Suitable for all business sectors with excellent growth potential. ACE markets are sponsor-driven. Your business should have the following attributes to be listed on this market:
- A risk management system in place
- Good corporate governance
- Responsible company directors
- A commitment to compliance
- Capable managers and directors who have demonstrated a capacity and ability to grow the business
- Good growth prospects
The Market Benchmark is driven purely by the market, as the name implies. There are no set of rules in this case, which means that even if your company qualifies for listing under the Regulatory Benchmark, it will still be subject to the expectations of the market or investors. The suitability of your company will be weighed against the following attributes:
- Financial performance
- The track record of the directors, managers and promoters in the company
- Your business’s position within the industry in relation to your competitors
Preparing to List on the Malaysia Stock Exchange
Before listing your business on the stock exchange, there are some key considerations which need to be noted:
- Is the company ready to invest the needed time and effort which goes into listing?
- Is listing your company going to meet the stakeholder’s goals and business objectives?
- Are you prepared financially for the costs involved in listing on the stock exchange and maintaining that listing?
- Are you ready to engage in continuous and ongoing communication with your investors once your company is listed?
- Listing on the stock exchange is going to come with greater accountability, is your company prepared to be under scrutiny when it comes to meeting ongoing reporting requirements and disclosure?
- Depending on how your original shareholding listing is structured once you’ve listed your company, the original shareholders’ control of the company will be diluted subsequent to the listing. Is your business ready for that?
The Malaysian Stock Exchange Listing Process
Once you have assessed the suitability of your company and determined that you want to proceed with getting listed on the stock exchange, there are several steps which you will need to complete:
- Step 1: Enlisting Professionals – You must appoint a principal adviser before listing your company. This individual will assist you with the appointment of the other necessary relevant advisers and professionals. The principal adviser will also be responsible for the formation of a Due Diligence Working Group (DDWG).
- Step 2: The Changes – Several areas of your business will need to be assessed for the listing, including your corporate structure, corporate governance, internal controls framework and who your board of directors comprises of.
- Step 3: Independent Directors – Bursa Malaysia’s Listing Requirements mandates that independent directors to your company’s board of directors must be appointed.
- Step 4: Listing Method – You will need to decide on what a suitable equity structure is, along with the best approach to offering your shares. This will depend on the nature of your business and what your capital requirements are.
- Step 5: Document Preparation – The DDWG will prepare the necessary documents, along with the prospectus for the submission process. It is important that the documents submitted are not misleading. For listings on the Main or ACE market, your prospectus will have to undergo a public exposure period on the SC’s website for 15 market days awaiting feedback from the public.
- Step 6: Getting Approved – The SC will issue a letter of approval for your IPO and an approval-in-principle for your prospectus if you are listing on the Main Market. Bursa Malaysia will provide the similar issuance for those listing on the ACE Market.
- Step 7: Registering Your Prospectus – Once your IPO has been approved, you will now prepare to register your prospectus. The DDWG will be responsible for the final legal verification before the registration takes place. Once your prospectus has been issued to the public, the offer period will commence. Once the offer period ends, your company’s shares will be allotted to the successful applicants.
If all your documents and requirements are in order and there are no issues experienced along the way, you can expect to be listed on the Malaysia stock exchange within 28 weeks.
Paul Hype Page & Co – SSM service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
We will call you back, please click below link and make appointment with our Sales consultant:
Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Malaysia Tax Planning
Step 3- Recommend the most suited type of Company Incorporation, Open Bank account and Work Visa
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly SSM Finanical and Tax Compliance
Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.
Get in Touch with Us Today.
Paul Hype Page