With Singapore on track for its worst year for new stock listings in a quarter-century, some of the city state’s companies are looking to possibly sell shares in Malaysia’s booming market.
A shift would buck the historical pattern of Malaysian firms offering equity in Singapore, which has traditionally been seen as offering better access to global institutional investors.
Singapore-listed Grand Venture Technology JLB Ltd, a supplier to the semiconductor industry, is eyeing a secondary listing in Malaysia that could happen as early as 2025, Bloomberg reported earlier this month. UMS Holdings 558 Ltd, another chip-related firm listed in Singapore, has said it is considering a similar move.
“We believe these companies are looking to tap a different liquidity pool, and Malaysia is a choice given the proximity and depth of market,” Raymond Chooi, the regional head of equity capital markets at Maybank Investment Bank Bhd, said of Singapore-based firms broadly.
Malaysia has seen a surge in listings, with more than 30 deals raising a total of US$1.30 billion (RM5.35 billion) so far this year, more than in all of 2023, according to data compiled by Bloomberg. In contrast, only one company has debuted thus far in Singapore, which is on track for its lowest annual volume of initial public offerings (IPOs) since 1998.
Relative political stability, eased market regulation and a boom in local stocks tied to artificial intelligence have helped Malaysia regain favour with global investors. The Kuala Lumpur Composite Index is up 15% this year, on track for its best performance since 2010.
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Singapore, meanwhile, has been struggling to lure new share sales amid outdated rules and poor liquidity. The Straits Times Index is up about 12% on the year, trailing measures of global and regional peers.
Malaysia’s market reflects “the success of the bourse’s efforts in tweaking its operating model to attract small- and mid-cap companies to list”, said Chan Yew Kiang, the Asean and Singapore IPO leader at Ernst & Young LLP. Meanwhile, “companies operating in sectors that are considered more niche, or in innovative sectors, such as technology and life sciences, may face a lower valuation and investor interest” in Singapore, he added.
Among upcoming deals expected to take place in Singapore, SCI Ecommerce Pte Ltd is planning to list on the domestic exchange next year, Bloomberg reported earlier this month. US-listed software firm AvePoint Inc is said to be weighing a second listing in the city state.
