Introduction

Substantial amount of fund is required for a growing company to be more competitive among other companies in the same sector. The growth of a company can be enhanced by raising fund for expansion of its business through the issuance of IPO.

Suitability of a company to be listed on Bursa Malaysia can be assessed by the aids of professionals. 2 types of benchmarks such as regulatory benchmark and market benchmark are commonly used to assess the qualification of a company to go for public.

In this blog post, we will be discussing on the types of market and regulatory system for issuing an IPO. To understand more about IPO, please read MQ Trader - Introduction of IPO.

Regulatory Benchmark

The regulatory benchmark is a set of prescribed rules under the Securities Commission Malaysia’s (SC) Equity Guidelines and Bursa Malaysia’s Listing Requirement.

This benchmark is categorized into two sets of rules to identify the suitability of a company to be listed either on the Main Market or Ace Market.

Role of Securities Commission (SC)

For Main Market applications, IPO proposals are reviewed by the SC to make sure that they are obeying strictly to the Equity Guidelines. The applicant’s directors and major shareholders are not allowed to get involved in any unfavorable record and corporate governance issues.

The IPO prospectus is also reviewed carefully to ensure that all the key information is disclosed clearly in compliance with the Prospectus Guidelines – Equity and Debt. This action is taken, so as to protect investors for making informed investment decisions.

For Ace Market applications, only prospectus review is taken into consideration.

Main Market

Main market is for listing established companies with a profit track record of 3 to 5 full financial years or companies with a sizable business.

There are a series of criteria has to be fulfilled by a company before it is qualified to be listed on Main Market. The key factors to be taken into account by SC for evaluation are the quality, size, operations, management experience and expertise of a company.

Overall, a company should have the following qualities in order to be listed on the Main Market:

1. Identifiable Core Business

A company that has majority of control over an identifiable core business which can act as main source of operating revenue or after-tax profit. A core business owning investments in other listed corporations or businesses will not be qualified.

2. No conflicts of interest

A company that has high ability to solve any situation with conflicts of interest.

3. Strong Business Prospects

A company that is growing at high rate, possessing sizeable brand equity and market share and staying competitive with a core business that is can generate consistent and profitable return.

4. Good Management

A company that is managed by experienced people with high qualification.

5. Good Corporate Governance

A company with strong corporate governance policies and practices.

6. Healthy Financial Position

A company with positive financial results (i.e. cash flow, profits and revenue) as well as enough working capital for at least 12 months.

Ace Market

Ace Market characteristics and its listing requirement will be further discussed in the next blog post – MQ Trader – The requirement for issuing an IPO (Part 2).

MQ Trader Workshop

We would like to share with you that MQ Trader Workshop is coming soon!

For those who are interested, you can visit MQ Trader Workshop - Budget 2019 Outlook & Backtesting With MQ Trader [Free Registration!] to know more about our coming workshop on 14 November 2018. 

*Note: 300 MQ Points will be given away in the workshop!

Community Feedback

We encourage traders to try out and evaluate the MQ Trader system and provide us feedback on the features you like to see in the system. We have received many positive feedbacks so far, and we are currently compiling and reviewing them for possible inclusion into the next release of the system.

We would like to develop this system based on community feedback to cater for community needs. Thanks to all those who have provided valuable feedback to us. Keep those feedbacks coming in!

Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

Join us now!

MQ Trader stock analysis system uses Artificial Intelligence (AI), various technical indicators and quantitative data to generate accurate trading signals without the interference of human's emotions and bias against any particular stock. It comprises trading strategies which are very popular among fund managers for analysing stocks. 

MQ Trader stock analysis system is SPONSORED for MQ Trader members. To use this amazing tool, you can sign up via MQ Trader Sign Up!

Contact us

Please do not hesitate to contact us if you have any enquiry: