Kuala Lumpur, 13 April 2007
Bigger and better quality IPOs considered by SC in Q1 – Overall increase in approvals for corporate proposals
A better understanding and appreciation of Securities Commission (SC) requirements resulted in better quality proposals. This is reflected in, among others, the significantly higher approval rate for initial public offering (IPO) proposals that were considered during the first quarter of 2007.
The SC approved eight out of nine IPO applications considered in the first three months of the year comprising five Main Board and three Second Board companies. The potential market capitalisation of the IPOs approved amounted to RM2.552 billion, a more than twofold increase from the RM1.026 billion approved in the fourth quarter of 2006.
This occurred amid the SC’s continued gate-keeping role coupled with facilitative measures introduced since early 2006 such as pre-submission consultation and post-decision meetings with issuers and advisers. The meetings enabled issuers and advisors to pre-consult on corporate proposals as well as to understand the grounds for rejection, resulting in a better understanding of the SC’s expectation on corporate proposals.
The SC continued to meet its processing timelines with 92 per cent of corporate proposals cleared in time, up from the 84 per cent achieved in the fourth quarter of 2006. Meanwhile, 99 per cent of licensing applications were processed within the stipulated time, repeating a feat achieved in the previous quarter.
In this quarter, it is also notable that four of the five corporate licensing applications approved were for investment advisors. This increase can be linked to the rising opportunities in the current market for corporate advisory activities via debt and equity financing, M&As, investment research and structured products offerings.
Capital market statistics released by the SC cover information on processing, approvals and rejections of submissions, including timing and reasons. In addition to these scorecard indicators, the periodic quarterly statistics of submissions approved by the SC for the first quarter of 2007 were also reported.