Despite profit dip, Bursa Malaysia's IPO growth attracts Singapore firms' interest

Business Times

2 days ago

[KUALA LUMPUR] Bursa Malaysia is emerging as a key listing venue for Singapore-based companies, even as the bourse operator reported a 19.3 per cent year-on-year (yoy) drop in net profit to RM125.5 million (S$37.8 million) for the first half of 2025.
The exchange is seeing rising interest from Singapore companies seeking secondary or dual listings, buoyed by its strong performance in the Asean initial public offering (IPO) market.
These developments come despite weaker overall trading volumes that have weighed on Bursa's financial performance.
Fad'l Mohamed, chief executive officer of Bursa Malaysia, told a results briefing on Tuesday (Jul 29): 'We are seeing more interest from Singapore companies. One of them is UMS Integration , which will be listed on the main market... this Friday.'
The high-precision engineering and manufacturing company is pursuing a secondary listing on Bursa Malaysia through an introductory route to broaden its investor base and boost stock liquidity. No new shares will be issued; instead, initial liquidity will be supported by a market-making arrangement involving shares borrowed from CEO Andy Luong.
The listing's reference price will be pegged to UMS Integration's Jul 31 closing price on the Singapore Exchange, ahead of its debut on Bursa Malaysia on Aug 1.
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Meanwhile, Oiltek International and Q&M Dental Group – also Singapore-based companies – have proposed secondary listings on Bursa as well.
Precision manufacturing and assembly solutions provider Grand Venture Technology was also pursuing a secondary listing on Bursa's main market but halted the plan in June , despite receiving approval from Securities Commission Malaysia approval months earlier.
'Bursa Malaysia continued to top other bourses in Asean in the first half of 2025 across three key metrics of IPOs: number of IPOs, total IPO market capitalisation, and total IPO funds raised,' noted Fad'l.
The exchange hosted 32 IPOs in H1, raising RM4 billion and posting a total IPO market capitalisation of RM17.4 billion. This compares with 21 IPOs and RM2.2 billion raised during the same period in 2024.
According to Deloitte, Bursa Malaysia captured over 67 per cent of the IPO proceeds in South-east Asia , which overall had 53 IPOs and raised more than US$1.4 billion in H1 2025.
'We have a healthy pipeline of IPOs in the coming months and are well on track to achieve our annual target of 60 IPOs and RM40.2 billion in total market capitalisation by end-2025,' Fad'l added.
Profit squeeze from lower trading activity
Despite the strong IPO pipeline, Bursa Malaysia's financial results were hit by a downturn in trading activity amid global market headwinds. H1 revenue fell 7.8 per cent to RM357 million, dragged by a 15.5 per cent drop in trading revenue to RM213 million.
Second-quarter net profit fell 29 per cent yoy to RM57.1 million, while revenue declined 13.9 per cent to RM172.6 million.
'Global developments, including the United States' ongoing tariff negotiations with its trading partners and persistent geopolitical tensions, impacted market sentiment and weighed on equity markets,' Fad'l explained.
Securities market trading revenue dropped nearly 24 per cent to RM146.4 million, with average daily trading value down 24.8 per cent at RM2.5 billion. Trading velocity also fell to 32 per cent from 42 per cent a year earlier.
Nevertheless, Bursa Malaysia declared an interim dividend of 14 sen per share, translating to a total payout of RM113.3 million, or 90.3 per cent of net profit – offering a yield of 3.7 per cent.
Optimism for second half
Bursa Malaysia's financial results for H1 2025 were impacted by a downturn in trading activity. PHOTO: BT FILE
Despite the current conditions, Fad'l remains optimistic, anticipating improved market sentiment in the coming quarters.
'Funds are currently sitting on cash, but we anticipate they will start deploying it, capitalising on forward-looking catalysts and expected growth opportunities in 2026,' he said.
He noted that the second half of the year will be the prime time for fund managers to capture the upside of 2026. 'With this elevated cash being injected into the market, it's set to propel the average daily trading value.'
Citing analysts' estimates, he believes that the average daily trading value will increase to RM2.6 billion in H2.
Therefore, Bursa is maintaining its 2025 profit before tax target at the RM369 million to RM408 million range, a key performance indicator.
Derivatives, Islamic and data segments show growth
Bursa's derivatives market revenue rose 8.1 per cent to RM56.1 million in H1, supported by active trading in crude palm oil futures. The exchange also relaunched its Single Stock Futures contracts in March with new specifications to widen its investor base.
Revenue from the Islamic capital market jumped 23 per cent year on year to RM11 million, while non-trading revenue – covering listing, issuer and depository services – increased by 7.6 per cent to RM130.5 million.
Data business revenue grew 6.4 per cent to RM40.5 million, driven by expanding licensing subscriptions and rising demand for high-quality, actionable financial and sustainability data.
As at Jun 30, Bursa Malaysia's total market capitalisation stood at RM1.9 trillion, down 6.1 per cent from a year earlier.