KUALA LUMPUR (July 9): The first half of 2019 (1H2019) saw fewer Malaysian companies opting to list their companies in stock exchanges overseas, according to the Ministry of Finance (MoF).

In a written reply to the Dewan Rakyat yesterday, MoF said four companies made their initial public offering or IPO overseas in 1H2019, compared to six in 2018, and 11 in 2017.

“The listing of the shares of local companies on the stock exchange of another country is not unusual. There are many factors that cause Malaysian companies to choose to be listed overseas. Among them is that the company has a business overseas,” MoF said.

Overseas listing may also help reduce a company's exposure to foreign exchange risk as a result of fund movements arising from a company's operations and financial obligation outside Malaysia, it explained.

Other factors that lead to overseas listing include: branding enhancement, confidence from customer and suppliers, and expanding the reach of one's business in the listing destination.

“For example, companies planning to extend their operations to China may list their companies on the Hong Kong Stock Exchange to enhance the visibility of their companies in Hong Kong and China,” it said.

As at June 30, 2019, MoF said 68 Malaysian companies have been listed on foreign exchanges, including companies which have been listed as early as 1948.

And the overseas listing destinations chosen are: Singapore (24 companies), Australia (12 companies), Hong Kong (24 companies) and the United Kingdom (eight companies).

Bursa ranked first in Asean for total funds raised via IPOs
The ministry went on to say that Bursa Malaysia has stepped up its ongoing marketing efforts and was ranked first among Asean exchanges for total funds raised through IPOs in the first half of this year, with 14 companies raising US$329 million in all.

“This performance is better than Indonesia (17 IPOs; US$170 million raised), Thailand (nine IPOs; US$127 million) and Singapore (six IPOs; US$36 million).

And last year, Bursa Malaysia provided listing consultancy services to 140 companies, besides organising and participating in 20 IPO seminars nationwide.

“Bursa Malaysia has also worked with various organisations to promote listing in Malaysia. These measures will encourage local companies to consider Bursa Malaysia as the first option when they decide to list their business,” it added.