Healthy IPO pipeline to face tougher investor demands in 2H

KUALA LUMPUR, 7 AUGUST 2026 —

Malaysia’s IPO market raised US$1.34 billion in the first half of 2026, taking 43% of Southeast Asia’s proceeds as 41 listings priced.

“The more important observation is not just the number of companies coming to market, but also the size and diversity of the listings,” he says.

Bursa Malaysia shifted its 2026 focus from volume to quality and scale, targeting RM28 billion in IPO market capitalisation and encouraging large issuers valued at RM1 billion or more. The strategy was validated by Sunway Healthcare Holdings Bhd’s RM2.86 billion listing in March, the largest in nine years. The group closed its first day nearly 28% above its RM1.45 issue price and last traded at RM1.96 on July 22, still 35% above the IPO price.

Less uniform results emerged among other Main Market debutants. MTT Shipping and Logistics Bhd closed at 97 sen on July 22, 5.8% below its RM1.03 issue price. Empire Premium Food Bhd rose to 99 sen from 70 sen, while SkyeChip Bhd surged to RM3.50 on debut—almost four times its 88 sen issue price—before closing at RM3.02.

Lock points to EI Power Bhd’s listing as proof that listed groups can unlock value in individual divisions. EI Power, a former subsidiary of OCK Group Bhd, listed on its own merit and now provides a separate capital-raising platform for its business.

Investor behaviour has tightened, with Datuk Bill Tan Choon Peow, managing director of M&A Securities Sdn Bhd, noting that retail participation hinges on visible institutional support. “Retail investors will only put their money in when they see IPOs that are institutionally backed,” he says. Tan cites Hock Soon Capital Bhd, a poultry player offered at 7.1 times FY2025 earnings, as an example of limited institutional interest due to sector maturity concerns.

EI Power, which supplies back-up electrical solutions to data centres, continued to draw institutional demand. “The deciding factor for IPOs is not whether it is an ACE Market or Main Market listing,” Tan says. “It is the business itself and the sector in which it operates.” He expects companies exposed to data centres, semiconductors and renewable energy to remain attractive.

The Securities Commission Malaysia revised its Equity Guidelines on May 28. For the Main Market, applicants must now record aggregate after-tax profit of at least RM30 million over the latest three financial years, including at least RM15 million in the most recent year, up from RM20 million over three to five years with a RM6 million minimum in the latest year.

The ACE Market is being reinforced as a sponsor-driven market, with new rules including a minimum two-year post-listing track record before a transfer to the Main Market and removal of certain sponsorship and moratorium exemptions.

Lock says the changes sharpen the distinction between markets but warns issuers against assuming higher valuations will follow. “Meeting a higher profit threshold does not automatically entitle an issuer to a higher valuation,” he says. Valuation will still hinge on earnings quality, sustainability, growth prospects, return on capital, governance and peer comparables.

He views the greater flexibility in assessing operating cash flow as pragmatic. “A rigid positive cash-flow requirement could disadvantage otherwise viable companies whose cash is temporarily absorbed by expansion,” Lock says. “The principal adviser must explain and substantiate any negative operating cash flow, while the applicant must still demonstrate a healthy financial position with no modified audit opinion or material going-concern uncertainty.”

Under the revised rules, renewable energy companies may combine several projects—solar, wind or hydro assets—to meet the Main Market’s RM500 million infrastructure-project threshold, provided each project costs at least RM100 million. Lock says the change could facilitate listings of renewable-energy portfolios and asset-backed businesses like data centres and digital infrastructure once they generate mature and predictable cash flows.

Malaysia accounted for US$1.34 billion of Southeast Asia’s IPO proceeds in the first half, according to Deloitte’s Southeast Asia Mid-Year IPO Snapshot 2026. Singapore ranked second with US$868 million. The region recorded 47 IPOs that raised more than US$3.07 billion, down from 53 listings and US$1.41 billion a year earlier. While deal volume declined, larger offerings more than doubled proceeds and lifted total IPO market capitalisation to US$15.07 billion from US$7.70 billion.

Lock attributes Malaysia’s performance to a facilitative regulatory process, active market promotion by Bursa Malaysia and a comparatively developed domestic listing ecosystem. “Malaysia has a broad and developed IPO ecosystem comprising principal advisers, legal advisers, reporting accountants, regulators, institutional investors and a substantial domestic retail investor base,” he says. “This gives companies access to the professional capacity required to prepare for listing and provides different pools of demand when the offering reaches the market.”

Related: Sunway · Bursa Malaysia