Kuala Lumpur, 21 July 2010

Capital raising activities remain buoyant in Q2 2010
RM10.7 bln expected to be raised from the capital market through IPOs, private debt securities and sukuk issuances

Companies continued to tap on the Malaysian capital market as an attractive source of funding as seen in the Securities Commission Malaysia’s (SC) scorecard for the second quarter of this year.

Despite the global market pressure on Initial Public Offerings (IPOs) which has seen issuers downsizing or delaying their offerings, interest in Malaysia’s IPOs still remains steady. Malaysia is expected to record higher IPOs in 2010 than in 2009 where 13 companies have been listed to date as opposed to 14 for the entire 2009.

The SC announced in its quarterly scorecard today that it has approved three IPOs this quarter, bringing the number of IPOs approved in the first six months of the year to 13. In contrast, a total of 12 IPOs were approved throughout 2009.

One of the IPOs approved in the second quarter of 2010 was of a China-based company. The SC also approved its first secondary listing application, after CIMB Group Holdings application for listing on the Stock Exchange of Thailand received the SC’s nod.

The three approved IPOs are expected to have a combined market capitalisation of RM888 million. These companies are expected to raise approximately RM166 million of funds from the market.

Higher interest was also seen in the bond market where 12 RM-denominated private debt securities proposals were approved this quarter with amount to be raised totaling RM10.5 billion. This is a considerable increase from the first quarter which saw eight approvals with amount to be raised totaling RM9.18 billion. In addition, the SC had also approved 3 USD-denominated private debt securities with amount to be raised totaling USD600million compared with one approval with amount to be raised of USD450 million in the first quarter.

During the quarter, one application for new Real Estate Investment Trust (REIT) was also approved and has since been listed.

The sukuk market also saw a significant boost in the second quarter with seven proposals approved compared to two in the first quarter and the amount to be raised totaling RM6.9 billion this quarter compared to RM590 million in the first quarter.

The SC maintained its strong performance standard with 99.1 percent of licensing applications and 96 percent of the corporate proposals processed within the time charters. A total of 2004 licensing applications were received in the second quarter, higher than the 1630 licensing applications received in the first quarter.

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 quarterly statistics of submissions approved by the SC for the second quarter of 2010 were also reported.

The full series of capital market statistics released by the SC is available here.