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Main Market, ACE Market and LEAP Market of Bursa Malaysia

Main Market, ACE Market and LEAP Market of Bursa Malaysia

Bursa Malaysia, the stock exchange of Malaysia, offers three distinct listing platforms to cater to companies at various growth stages:

  1. Main Market: This is the premier market for well-established companies with a proven track record of financial performance and stability. It's the most stringent market in terms of listing requirements, making it a benchmark for credibility and reliability. Companies listed on the Main Market are generally large and reputable, making them attractive to a wider range of investors.

  1. ACE Market (Alternative Capital Exchange): This is a growth-oriented market designed for companies with high growth prospects. It offers a more flexible listing environment compared to the Main Market, making it easier for promising companies with the potential for significant future growth to obtain funding. Companies on the ACE Market tend to be smaller and less mature than those on the Main Market, but they offer the potential for higher returns for investors who are willing to take on a greater degree of risk.

  1. LEAP Market (Leading Entrepreneur Accelerator Platform): This is a platform specifically designed for emerging companies, including small and medium-sized enterprises (SMEs), to raise capital and gain greater visibility. It has the most relaxed listing requirements compared to the other two markets. However, due to the inherent higher risk associated with such companies, the LEAP Market is only accessible to sophisticated investors as defined by the Malaysian Securities Commission.

Main Market Listing Requirements

The listing requirements for Bursa Malaysia's Main Market are designed to ensure companies seeking to go public are financially strong and have a proven track record. Here's a breakdown of the key criteria:

Profit or Market Capitalization Test:

  • Companies must meet either a minimum profit track record or a minimum market capitalization level.

  • Profit Test: This involves demonstrating uninterrupted profits for a specific period. The minimum requirements are:

  • Uninterrupted profit for 3 to 5 full financial years.

  • Aggregate after-tax profit of at least RM20 million (around US$4.6 million).

  • After-tax profit of at least RM6 million (around US$1.4 million) for the most recent financial year.

  • Market Capitalization Test: This requires the company to have a minimum market value upon listing. The specific requirement is:

  • A total market capitalization of at least RM500 million (around US$115 million).

Additional Considerations:

  • Track Record: Companies must have been operating in their core business for at least one full financial year before applying for listing.

  • Public Shareholding Spread: At least 25% of the company's total shares must be held by the public, with a minimum of 1,000 public shareholders holding at least 100 shares each.

  • Minimum Price: The initial public offering (IPO) price per share must be at least MYR0.50 (around US$0.11).

  • Corporate Governance: Strong corporate governance practices are expected, demonstrating the company's commitment to transparency and accountability.

For foreign companies seeking a Main Market listing, they must comply with the corporate governance requirements of their home jurisdiction, with standards equivalent to those in Malaysia.

ACE Market Listing Requirements

Compared to the Main Market, the ACE Market of Bursa Malaysia has a more relaxed approach to listing requirements, focusing on a company's growth potential rather than established financial performance. Here are the key points to remember:

  • No Minimum Profit or Track Record: There's no requirement for a minimum profit track record or specific operating history for companies seeking an ACE Market listing. This allows promising young companies with limited financial history but high growth prospects to access public funding.

  • Sponsor-Driven Market:  The ACE Market relies on a sponsor to assess the suitability of the listing applicant. The sponsor, typically an investment bank or financial institution,  evaluates the company's business plan, growth potential, and overall viability.

  • Public Shareholding Spread: Similar to the Main Market, there's a public spread requirement. At least 25% of the company's total shares must be held by the public, with a minimum of 200 public shareholders each holding at least 100 shares.

  • Bumiputera Requirement: Unlike the Main Market, there's no mandatory Bumiputera (indigenous Malay) equity requirement upon initial listing on the ACE Market.

  • Post-Listing Sponsorship: Sponsorship is mandatory for at least three years following the listing. This ensures continued guidance and support for the newly listed company.

Additional Considerations:

  • Financial Viability: While there's no minimum profit requirement, the company needs to demonstrate a sound financial plan and growth strategy to convince the sponsor and potential investors.

  • Management Experience: A strong and experienced management team is crucial to inspire confidence in the company's future.

  • Corporate Governance: Strong corporate governance practices are still expected, showcasing the company's commitment to responsible management.

By easing the financial benchmarks, the ACE Market provides a valuable platform for high-growth companies to raise capital and achieve their growth plans.

LEAP Market Listing Requirements

The LEAP Market, designed for emerging companies and SMEs, has the most relaxed listing requirements among the three Bursa Malaysia platforms. Here's a breakdown of the key criteria for getting listed on the LEAP Market:

  • Company Incorporation: The company must be a public company incorporated in Malaysia.

  • Core Business: A clearly identifiable core business is necessary for the company to be eligible for listing.

  • Public Shareholding Spread: At the time of admission, a minimum of 10% of the company's total ordinary shares must be in the hands of public shareholders. This requirement is less stringent compared to the Main and ACE Markets.

  • Suitability Assessment:  An approved Adviser plays a crucial role. The company must undergo a suitability assessment by this adviser who will guide them throughout the listing process.

  • Sophisticated Investors Only: Unlike the other two markets, the LEAP Market is restricted to sophisticated investors. These are defined by the Malaysian Securities Commission and typically have a higher risk tolerance due to the inherent nature of the companies listed here.

Additional Considerations:

  • Financial Track Record: There's no minimum profit track record required for LEAP Market listing. However, having a well-defined financial plan and demonstrating future growth potential is crucial to attract investors.

  • Corporate Governance: While there may be less stringent financial requirements, good corporate governance practices are still expected to ensure transparency and accountability.

By offering a more accessible platform with reduced barriers to entry, the LEAP Market caters to promising new ventures and SMEs seeking to raise capital for growth.

In summary, the choice of listing platform on Bursa Malaysia depends on the company's stage of development, financial strength, and growth prospects. The Main Market is ideal for established companies, the ACE Market caters to high-growth companies, and the LEAP Market is suited for emerging companies and SMEs.

Further Resources:

You can find more detailed information on the listing requirements for Bursa Malaysia's Main Market on "Bursa Malaysia Listing Requirements".

You can find more details on the ACE Market listing requirements on "Bursa Malaysia ACE Market Listing Requirements".

For more detailed information on the LEAP Market listing requirements, you can find on "Bursa Malaysia LEAP Market Listing Requirements". 

Main Market, ACE Market and LEAP Market of Bursa Malaysia

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