There is high demand from the SME sector for the new market
14 May, 2017THEEDGEMARKETS.COM
KUALA LUMPUR: Bursa Malaysia is keeping to its target to launch the new small and medium enterprise (SME) market in the second quarter of the year (2Q17), said its chief commercial executive Selvarany Rasiah.
“That (roll-out in 2Q17) is a possibility, but we will have to see,” she said at the opening of the “Grow Your Business, List On Bursa” forum co-organised by the Malaysian Investment Development Authority (Mida) and Bursa yesterday.
“We are trying our best on our end to [launch the SME market] as expeditiously as possible. Certainly, we will give ample notice to the market when we roll it out,” she added.
Selvarany added that opportunities will be aplenty for SMEs with the introduction of the SME market this year to add to the existing Main Market and ACE Market. The SME market will offer less stringent regulations and a lower listing cost.
She also pointed out that there is high demand from the SME sector for the new market. “We have had a fairly extensive discussion with companies that are looking to raise capital as well as investors. In fact, the advisers have started working with these companies [to list on the SME market].
“Once the framework is issued, we do expect to see applications coming in,” she added.
The sponsor-driven market, said Selvarany, will cater to funds and high-net worth individuals with net assets totalling RM3 million, or individual and joint household income at RM300,000 and RM400,000 per year respectively.
Selvarany said the local bourse is also expected to see more initial public offerings (IPOs) this year, compared with 2016, which saw 11 companies raise a total RM660 million. It has already witnessed a market capitalisation of over RM5 billion driven by six new listings in 1Q17 alone.
Meanwhile, private companies seeking to raise capital for growth purposes are urged to consider listing their shares on Bursa while reducing dependence on government incentives.
Mida deputy chief executive officer Datuk N Rajendran said government funds alone, such as those provided by Mida, are insufficient to support the growth of upcoming and existing companies.
“We believe the government cannot continually support the expansion and reinvestment of existing companies by providing them incentives in terms of grants. Although these are still available, we would like them to go out to the market and seek funds,” he said.
“While we have some funds to support government incentives, I don’t think it is sufficient,” added Rajendran.
Its incentives include the Domestic Investment Strategic Fund, aimed at enabling companies to be more active in the global value chain. SMEs can also get assistance from SME Corp Malaysia, SME Bank and Malaysian Industrial Development Finance Bhd.
Rajendran also highlighted the impending need for companies to raise funding to embrace Mida’s aggressive push towards Industry 4.0 — a trend towards automation and data exchange — which will be expensive.