Pipeline of Malaysian listings on US’ Nasdaq grows

PETALING JAYA: More Malaysian companies are seeking to get on board the United States’ electronic stock exchange Nasdaq – which has a reputation for listing fast-growth technology businesses.

Starbox Group Holdings Ltd is the first ever Malaysia-headquartered company to list on Nasdaq.

Evoair, a green technology company focusing on eco-friendly heating, ventilation and air-conditioning, plans to list on Nasdaq in the fourth quarter of 2023.

Aegis Communication Sdn Bhd executive director Jason Fong, who is handling investor relations in the proposed listings of Graphjet Technology Sdn Bhd and ARB Bhd’s Internet of Things arm on Nasdaq, revealed that US bankers and advisers are coming to Kuala Lumpur to encourage and fund local businesses to list on the US stock exchange.

That’s why we can see more hype on this. The bankers are being very aggressive, they’re providing a lot of incentives on underwriting, for example,” he told SunBiz.

Fong said it is good for Malaysian companies to consider listing on Nasdaq because of its larger pool of investors, better credibility and greater funding opportunities.

“The US is a must-go venue when it comes to capital market investment. On Bursa Malaysia, your investors mainly come from Southeast Asia or a maximum of Asia only,” he said.

He added that it will also increase Malaysia’s exposure in the global scene because global investors will try to find out about Malaysian companies, legislations, and its capital market structure.

“Then maybe their businesses can come to list in this part of the world. It can be a win-win situation,” Fong said.

Maybank Investment Bank Equity Capital Markets head Raymond Chooi commented that companies’ reasons to list in a market outside their home country include seeking a different pool of investors, enhancing profiling, and tapping alternative markets.

“All these reasons play a part in determining a company’s valuation which is typically a driver to improve shareholders’ return,” he said.

Kristoff Capital Group business development director Daniel KS Chang stated that besides technology, the tipping point to list in the US is their market alignment with environmental, social & governance and sustainability values ​​as global institutional investors are seeking stocks that meet this fundamental.

However, he said if the corporate objective is to go regional, Malaysian companies should consider Singapore Exchange (SGX) before Nasdaq.

“Malaysian companies with Asean or Asia as their main playground should concentrate on capital markets within Asia. Due to the decoupling between the US and China, US investors are forced to focus on West-based markets.

“Dual listings on Bursa Malaysia and SGX can be ideal. A unique case study is IHH Healthcare Group that has demonstrated that familiarity with Asean based capital markets can yield a higher outcome,” Chang said.

Meanwhile, Bursa Malaysia told SunBiz that it has a unique feature and a competitive edge – the syariah-compliant element.

“The syariah-compliant element widens the investors’ base from the conventional funds to include the additional needs to meet the syariah mandate of Islamic investing.

“More importantly, the issuers need to evaluate whether the capital market has the ability to provide them with the valuation they seek. They will need to weigh multiple factors such as financial performance and growth prospects, including the business segment it is involved in such as its market base – whether domestic or export-oriented business, its brand name, as well as its visibility within the market, ” he said.

Chooi said Bursa Malaysia’s three markets – Main, ACE and LEAP – provide ample options and liquidity for companies to raise capital at various stages of growth.

“For business owners or major shareholders, they should also consider the sustainability of such valuations over a longer term, especially during challenging times in the market,” he cautioned.

Fong said not all companies are suitable to list on Nasdaq, mainly because they need to have a business that is globally understood. “For example, if you’re doing a construction in Bukit Jalil, investors from New York wouldn’t understand it,” he explained.

Evoair group managing director and co-founder Kevin Chan observed that most Malaysian companies seeking to list on Nasdaq are tech companies.

“The market there appreciates tech companies more than here,” he told a press conference in September.

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