IPO Applications Double in Q3; Half are MESDAQ Listings

Regulatory Efficiencies Maintained

Kuala Lumpur, 11 October 2007

There was a two-fold increase in initial public offering (IPO) applications in the third quarter of 2007, with half of these for listing on MESDAQ. The increase in IPO applications reflected the continued growth of the Malaysian capital market and an increasing interest to list on MESDAQ, augmented by high levels of regulatory efficiencies.

The Securities Commission (SC) said it received 13 new IPO applications in the third quarter as compared to seven in the previous quarter. Six of the 13 applications were for listing on MESDAQ. The SC said this today in conjunction with the release of its performance scorecard for the July-September period.

The size of IPO applications approved during the period under review was significantly larger. The potential market capitalisation of the three IPO applications approved in the third quarter amounted to RM2.41 billion, as compared to RM414 million for the same number of IPOs approved in the previous quarter.

MESDAQ companies are also graduating to the Main Board, reflecting the greater strength and quality of these companies as well as realizing the Exchange’s objective of attracting young technology-based and high growth companies without the required profit track record for incubation and eventual progression to the Main Board. In the third quarter, two out of the seven applications for transfer to the Main Board were by MESDAQ companies. So far this year, the SC has approved three applications for the transfer of MESDAQ companies to the Main Board.

The SC continued to exceed the 90 percent mark in its performance standards, with 99 percent of licensing applications and 95 percent corporate proposals processed within their respective time charters.

The SC introduced a single licensing regime on 28 September 2007 which will contribute to even greater business efficiencies in the capital market as well as allow qualified intermediaries to hold longer tenured licences. As an incentive to intermediaries with high standards of corporate governance and market conduct, the SC may extend the licence tenure to 36 months for Capital Market & Services Licence holders and 24 months for Capital Market & Services Representative Licence (CMSRL) holders.

The capital market resource pool expanded further with more new entrants. This is reflected in the 20 percent jump in new intermediary licences granted during the period. Forty nine percent of the new licences were dealer’s representative licences.

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 third quarter of 2007 were also reported.

The full series of capital market statistics released by the SC can be viewed here.


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