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New Straits Times
13-05-2025
- Business
- New Straits Times
IPO momentum slows, but market holds steady
KUALA LUMPUR: Heightened global uncertainty, largely stemming from escalating trade tensions, has dampened sentiment across equity markets, putting pressure on initial public offerings (IPOs)—and Malaysia is no exception. Despite the global downturn in IPO activity, Universiti Kuala Lumpur Business School economic analyst Associate Professor Aimi Zulhazmi Abdul Rashid said Malaysia's domestic economy remains resilient. "The domestic business climate is certainly good and flush with liquidity. Among them is the lowering of the statutory reserve requirement, while the overnight policy rate is held firm at 3.0 per cent for almost two years, creating financial stability and encouraging positive business growth in all economic segments. "As the export data continue to be challenged by global development, the domestic economy is healthy with low inflation at 1.5 per cent and double-digit growth in the construction industry," he said. As of now, Bursa Malaysia has recorded 20 IPOs for the year, with 17 on the ACE Market and three on the Main Market. However, most of these listings have seen underwhelming performances, reflecting weak investor confidence. A notable example is Fibromat (M) Bhd, which debuted at 46 sen—representing a 16.36 per cent discount from its IPO price of 55 sen—highlighting the effects of ongoing market volatility. The challenging environment has also led to postponements of several planned IPOs. Cuckoo International (MAL) Bhd, which was scheduled to list on the Main Market on April 30, has delayed its debut by two months. Similarly, SPB Development Bhd has pushed back its IPO indefinitely, missing its earlier target date of April 21. According to UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research, Mohd Sedek Jantan, the ongoing trade tensions and investor caution are key factors behind the postponements. "The gap between Trump's trade rhetoric and concrete policy outcomes continues to fuel investor hesitancy. This uncertain environment necessitates careful IPO timing and a strong emphasis on fundamentals to navigate ongoing market turbulence. "Persistent external risks—including the threat of retaliatory measures from China or other trading partners—may further intensify delays, as companies confront growing concerns from stakeholders across their value chains," he told Business Times. Beyond immediate market implications, Mohd Sedek noted that the slowdown in IPOs could have longer-term effects on corporate governance. IPOs are vital for driving board transitions, attracting new directors, and aligning companies with evolving regulatory standards. "A prolonged IPO drought risks stagnating this dynamism, especially for high-growth sectors like tech and electrical and electronics. Reviving IPO activity is therefore essential, not merely for revitalising capital markets but for reinforcing the adaptive capacity of Malaysia's corporate governance ecosystem," he said. Malaysia's experience mirrors a global trend. Economic and geopolitical uncertainties have prompted IPO delays worldwide. In the US, protectionist trade policies have curtailed capital-raising efforts. India has also seen IPO deferments, with Avanse Financial Services and Anthem Biosciences among the latest to postpone listings. In Europe, fashion e-commerce giant Shein has paused its anticipated London IPO, joining a growing list of delayed debuts that includes Shawbrook Group and fintech firm Ebury. Looking ahead, Mohd Sedek believes Bursa Malaysia could still approach its annual target of 60 IPOs—but cautioned that ongoing uncertainty may temper expectations. "Unless market conditions stabilise significantly and the existing pipeline materialises without major delays – potentially closing the year with 50 to 55 listings, broadly in line with its 2024 performance," he added.
Sinar Daily
06-05-2025
- Business
- Sinar Daily
RM5,000 'decent salary' proposal out of touch with economic reality, says employers' group
RM5,000 decent salary unfeasible for most businesses now. Malaysian Employers Federation (MEF) president deems RM5,000 decent wage proposal unrealistic as employers are still struggling post-pandemic and face rising operational costs. Inset: Datuk Dr Syed Hussain Syed Husman SHAH ALAM – The proposal that a decent salary should be RM5,000 and above for single individuals and families with two children is viewed as unrealistic in the current economic context. Malaysian Employers Federation (MEF) president, Datuk Dr Syed Hussain Syed Husman said this was because most employers, particularly in the micro, small and medium enterprise (MSME) sectors, were still struggling to stabilise their financial footing after the Covid-19 pandemic. Rising operational costs, disruptions in global supply chains and shifts in consumer demand had limited employers' ability to offer salary increases without affecting business continuity. - Bernama photo According to him, rising operational costs, disruptions in global supply chains and shifts in consumer demand had limited employers' ability to offer salary increases without affecting business continuity. "Generally, any proposal to set a decent wage at RM5,000 and above did not take into account the current realities faced by employers and the global economic landscape, especially following the implementation of reciprocal tariffs by the United States (US) on exporters, including Malaysia. "The US's imposition of a 24 per cent reciprocal tariff on Malaysian products added pressure to the country's export competitiveness, even though it had been deferred for three months. "This directly affected company revenues, especially in the manufacturing and export sectors. "If labour costs also rise sharply, Malaysian exporters might lose international markets and investors might shift to countries offering more competitive labour costs," he told Sinar. Recently, UniKL Business School economist Associate Professor Dr Aimi Zulhazmi Abdul Rashid opined that the ideal and decent wage for single individuals or families with two children should be around RM5,000 and above, depending on whether they live in urban or rural areas. He stated that, based on data from the Department of Statistics Malaysia (DOSM), the average monthly basic decent living expenses (PAKW) for a household in 2023 was RM4,729. In fact, he further clarified that the PAKW in urban areas was higher than in rural areas, with figures at RM5,040 and RM3,631 respectively. To this, Syed Hussain believes that discussions on salary issues should be carried out comprehensively, involving the government, employers and employees, based on productivity data and actual economic growth. He also suggested that salary increases should be implemented gradually, in line with rising productivity and employers' financial capabilities. More Like This
