Time's ripe for companies to float shares
Published: 2013/06/10
COMPANIES that have expressed
an interest in floating their shares on Bursa Malaysia but have postponed it numerous times should consider implementing it now.
The stock market went berserk the day after Barisan Nasional won the 13th General Election on May 5, hitting historical highs and smashing record high and hitting another record high in the subsequent days.
Companies that are still reluctant to list should take the cue from UMW Holdings Bhd.
After countless postponements since 2008, the conglomerate announced last month that it is listing its wholly-owned subsidiary, UMW Oil & Gas Corp Bhd, on the Main Market this year.
Kudos to the company for its prudent and cautious management for any mistiming to its initial public offering (IPO) could send its shares tumbling and be undervalued, as had happened to Facebook's listing last year.
Companies that have announced their intentions to list, such as the Naza Group and 1901 Hotdogs, to name a few, may want to reconsider sharing profits with the public this year or next year.
Naza Group announced its intention to list its property unit, Naza TTDI Sdn Bhd, as early as last year but the group must have been wary of the volatile stock market.
But of course, companies must look at why it wants to go for a listing in the first place.
Other than to raise funds, there are many other good reasons for firms to float their shares.
When it comes to listing, it ultimately depends on the company's goal and vision.
Essentially, a listing is only partly to raise funds.
A company that is doing well and planning to expand can seek more funding from the capital market and listing is an option.
But, of course, the owners must be prepared to let go some of their shareholdings to the public and other investors.
But it's also about credibility as a public-listed company will have to adhere to a set of guidelines policed by the regulator.
A company's credibility will be enhanced as it has to furnish its financial performance results every three months, be transparent in its business dealings and give back to the people via CSR (corporate social responsibility) programme.
It is also usually easier for a listed company to do business.
When a Malaysian company is approached by a potential business partner from as far as Africa, it helps when you know the prospective partner is listed on the stock market as listed companies are transparent (due to the guidelines imposed by the stock exchange and the regulator).
A multi-billion-dollar global company will want to see the track record of its business partners and being a public-listed company will help facilitate the various business transactions.
The market is of the view that this year is a good time for IPO as positive global sentiment is expected to provide an upside momentum to share prices on Bursa Malaysia.
So, to the company directors, what are you waiting for?
To list or not to list?
The stock market went berserk the day after Barisan Nasional won the 13th General Election on May 5, hitting historical highs and smashing record high and hitting another record high in the subsequent days.
Companies that are still reluctant to list should take the cue from UMW Holdings Bhd.
After countless postponements since 2008, the conglomerate announced last month that it is listing its wholly-owned subsidiary, UMW Oil & Gas Corp Bhd, on the Main Market this year.
Companies that have announced their intentions to list, such as the Naza Group and 1901 Hotdogs, to name a few, may want to reconsider sharing profits with the public this year or next year.
Naza Group announced its intention to list its property unit, Naza TTDI Sdn Bhd, as early as last year but the group must have been wary of the volatile stock market.
But of course, companies must look at why it wants to go for a listing in the first place.
Other than to raise funds, there are many other good reasons for firms to float their shares.
When it comes to listing, it ultimately depends on the company's goal and vision.
Essentially, a listing is only partly to raise funds.
A company that is doing well and planning to expand can seek more funding from the capital market and listing is an option.
But, of course, the owners must be prepared to let go some of their shareholdings to the public and other investors.
But it's also about credibility as a public-listed company will have to adhere to a set of guidelines policed by the regulator.
A company's credibility will be enhanced as it has to furnish its financial performance results every three months, be transparent in its business dealings and give back to the people via CSR (corporate social responsibility) programme.
It is also usually easier for a listed company to do business.
When a Malaysian company is approached by a potential business partner from as far as Africa, it helps when you know the prospective partner is listed on the stock market as listed companies are transparent (due to the guidelines imposed by the stock exchange and the regulator).
A multi-billion-dollar global company will want to see the track record of its business partners and being a public-listed company will help facilitate the various business transactions.
The market is of the view that this year is a good time for IPO as positive global sentiment is expected to provide an upside momentum to share prices on Bursa Malaysia.
So, to the company directors, what are you waiting for?
To list or not to list?
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