This article first appeared in Capital, The Edge Malaysia Weekly on July 27, 2026 - August 2, 2026

FOLLOWING a strong first half that kept Bursa Malaysia’s position at the forefront of Southeast Asia’s initial public offering (IPO) market, industry professionals expect listing activity to remain robust in the second half of this year, supported by a healthy pipeline of prospective issuers.

However, investors are becoming more discerning, placing greater weight on valuation, earnings quality, institutional backing and the durability of each company’s growth prospects.

So far this year, Malaysia has recorded 41 IPOs — six on the Main Market, 29 on the ACE Market and another six on the LEAP Market, data on Bursa’s website shows.

“At the present pace, the full-year IPO count should remain strong and could come close to, or potentially exceed, the 60 listings achieved in 2025. However, the more important observation is not just the number of companies coming to market, but also the size and diversity of the listings,” Baker Tilly Malaysia managing partner for audit and assurance Datuk Lock Peng Kuan tells The Edge.

Notably, Bursa shifted its emphasis in 2026 from just the number of listing to quality and scale — targeting RM28 billion in IPO market capitalisation this year and encouraging large IPOs, defined as listings valued at RM1 billion or more, to deepen the market and stimulate trading interest.

This emphasis was reflected in the year’s most prominent transaction, Sunway Healthcare Holdings Bhd (KL:SUNMED), which listed on the Main Market on March 18. The group raised RM2.86 billion in Malaysia’s largest IPO in nine years and stood out as among Southeast Asia’s largest healthcare listings.

Valued at RM16.7 billion at its offer price, the IPO supported by about 20 cornerstone investors made a strong debut, closing nearly 28% above its RM1.45 issue price on the first day. Sunway Healthcare shares closed at RM1.96 last Wednesday (July 22), still 35% above its IPO price.

The aftermarket performance of other Main Market debutants was more varied.

As at last Wednesday, MTT Shipping and Logistics Bhd (KL:MTTSL) closed at 97 sen, 5.8% below its RM1.03 issue price, while Empire Premium Food Bhd (KL:EMPIRE), the parent of the Empire Sushi chain, was 41.4% above its 70 sen offer price at 99 sen.

SkyeChip Bhd (KL:SKYECHIP) was the standout performer. The home-grown semiconductor designer rose as high as RM3.50 on its Main Market debut, almost four times its 88 sen IPO price, and closed at RM3.02 last Wednesday.

Lock also highlights the listing of OCK Group Bhd’s (KL:OCK) former power-engineering subsidiary, EI Power Bhd (KL:EIPOWER), as an example of how listed groups can unlock the value of individual divisions.

“This demonstrates that the capital market is not only for privately owned businesses seeking growth capital. Existing listed groups can also use it to unlock the value of a distinct business division, establish a separate capital-raising platform and give investors clearer visibility over the performance and prospects of that business,” he says.

Yet beneath the headline numbers, dealmakers have observed a shift in investor behaviour, with demand following companies that have secured institutional backing.

“Investors are very selective now. Retail investors will only put their money in when they see IPOs that are institutionally backed. Otherwise, they may stay out,” remarks M&A Securities Sdn Bhd managing director Datuk Bill Tan Choon Peow.

Tan cites poultry player Hock Soon Capital Bhd (KL:HOCKSOON), which was offered at 7.1 times FY2025 earnings but attracted limited institutional interest because some funds viewed poultry as a mature or “sunset” industry.

By contrast, EI Power, which provides back-up electrical supply 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. It is the business itself and the sector in which it operates,” Tan says.

He expects businesses exposed to data centres, semiconductors and renewable energy to remain attractive.

On May 28, the Securities Commission Malaysia announced revisions to its Equity Guidelines and enhancements to the primary-market framework.

For the Main Market, the changes include higher profit requirements, stronger financial-reporting standards, greater flexibility in assessing operating cash flow and broader eligibility for infrastructure-related listings.

Under the revised profit test, a Main Market applicant must record aggregate after-tax profit of at least RM30 million over its latest three full financial years, including at least RM15 million in the most recent year. Previously, applicants needed aggregate after-tax profit of at least RM20 million over three to five years, including at least RM6 million in the latest year.

The ACE Market, meanwhile, is being reinforced as a sponsor-driven market. The revisions include a minimum two-financial-year post-listing record before a company may transfer to the Main Market, the removal of certain sponsorship and moratorium exemptions, and minimum public-share allocation requirements.

Lock says the changes should sharpen the distinction between the Main and ACE Markets, but warns issuers against treating the higher qualifying threshold as justification for demanding higher valuations.

“Meeting a higher profit threshold does not automatically entitle an issuer to a higher valuation. Valuation will still depend on factors such as earnings quality, sustainability, growth prospects, return on capital, governance, industry dynamics and comparable listed companies,” he says.

He sees 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, such as property developers acquiring land, retailers building inventory or manufacturers increasing production capacity. These businesses may record negative operating cash flow even while remaining profitable and commercially sound,” he 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. This creates a more balanced framework that recognises differing cash-flow patterns across industries.”

Under the revised rules, renewable energy companies may combine several projects, such as 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 eventually facilitate listings of renewable-energy portfolios and other asset-backed businesses, including data centres and digital infrastructure, once they generate mature and predictable cash flows.

Malaysia accounted for US$1.34 billion (RM5.48 billion), or 43%, of Southeast Asia’s IPO proceeds in the first half, according to Deloitte’s Southeast Asia Mid-Year IPO Snapshot 2026 report. Singapore ranked second with US$868 million, or 28%.

The region recorded 47 IPOs that raised more than US$3.07 billion, compared with 53 listings and US$1.41 billion a year earlier. While deal volume declined, the return of larger offerings more than doubled proceeds and lifted total IPO market capitalisation to US$15.07 billion from US$7.70 billion.

Baker Tilly’s Lock attributes Malaysia’s performance to a facilitative regulatory process, active market promotion by Bursa and a comparatively developed domestic listing ecosystem.

“Malaysia has a comparatively 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.”

Earlier engagement among issuers, advisers, Bursa and the SC has allowed significant issues to be addressed before formal submissions, improving regulatory certainty and shortening the effective time to market for well-prepared applicants.

Bursa’s local and international promotional efforts have also helped widen the pipeline. Lock says discussions have included overseas companies with meaningful Malaysian operations and issuers considering secondary listings.

Malaysia’s regional lead, however, does not mean its market is without weaknesses. Many IPOs remain relatively small, particularly on the ACE Market, while the depth of demand varies considerably between deals.

According to Tan, share placements of some ACE Market IPOs are increasingly being taken up by friends and associates of issuers, reflecting weaker broad demand.

“Several years ago, ACE Market listings were in high demand, but investors are much more selective now,” he says.

High-net-worth participation has also weakened amid losses in the equity market and geopolitical uncertainty, he observes.

“Until the [US-Iran] war ends, high-net-worth individuals may be staying out of the equities market simply because many have lost money. This just leaves the institutional funds that continue to stay invested and I believe that retail investors will follow their lead,” Tan says.

Retail oversubscription figures may appear substantial but actually reflect only a small portion of the total offering. Liquidity also remains uneven across Bursa’s three markets.

“Oversubscription figures must be interpreted carefully because the public tranche may represent only a relatively small proportion of the total IPO. A high oversubscription multiple does not necessarily mean the wider market will support any valuation, or that the same level of demand will remain after listing,” Lock points out.

M&A’s Tan says Malaysia could consider further measures to deepen liquidity and encourage equity-market participation, citing Singapore’s initiatives to strengthen its stock market.

These include the government’s S$1.5 billion (RM4.75 billion) top-up to the Equity Market Development Programme (EQDP) and corporate tax rebates of 20% for first-timers and 10% for secondary listers capped at S$6 million annually for qualifying companies seeking a listing on the Singapore Exchange.

Despite economic uncertainty and market volatility, the industry professionals say prospective issuers remain interested in pursuing a listing. Lock expects an active finish to 2026 and a healthy pipeline into 2027, as companies continue to view IPOs as a means to raise growth capital, strengthen governance, support succession planning and create a platform for future acquisitions.

“The main difference is that companies are approaching timing and valuation more carefully. They recognise that obtaining regulatory approval alone is not sufficient. They must also be able to communicate a compelling investment proposition and enter the market at a valuation that investors are prepared to support,” says Lock.

Potential major upcoming IPOs include pharmacy operator Big Caring Group Bhd, convenience-store chain KK Mart Retail Bhd and general insurer Chubb Insurance Malaysia Bhd, all of which have published draft prospectuses.

“What is interesting is not only their potential size, but also the variety. These businesses cover healthcare retail, convenience retail and financial services. They are established industries, but they are being brought to the market through companies that have achieved considerable scale and developed more sophisticated operating platforms,” says Lock.

He also sees continuing interest in food and beverage companies, supported by mergers and acquisitions, shareholder consolidation and private equity investment. However, brands must demonstrate that their concepts can be replicated profitably.

“The central issue remains whether the concept can be replicated profitably,” he says.

“The more important issue is price discovery. Issuers and existing shareholders naturally seek to maximise value achieved through IPO, while incoming investors require sufficient potential upside to compensate them for execution risk, limited public trading history and changing market conditions. Where these expectations do not meet, an IPO may need to be repriced, downsized or deferred. Alternatively, it may proceed at a valuation that results in weaker post-listing performance.”

An effective IPO market should reflect the structure of the economy, not just the size of its largest deals, Lock says. In Malaysia, many established businesses remain entrepreneur-led or family-controlled and may need public capital, stronger governance and succession planning to support their next stage of growth.

“The challenge is to help these companies transition into responsibly governed public entities without discouraging family ownership. Clearer separation between owners, boards and management, stronger independent oversight and better succession planning would allow Bursa to attract larger institutional listings while preserving access for credible entrepreneurial companies,” says Lock. 

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