Global issues cloud 2H25 IPO outlook
PETALING JAYA: The initial public offering (IPO) market, which started the year on a subdued note, faces an uncertain second half (2H25) as weak market sentiment, global headwinds and poor earnings season continue to dampen investor appetite.
A market watcher says the outlook for IPOs in 2H25 hinges on several unresolved global issues – including the outcome of potential US reciprocal trade tariffs expected in July, US-China trade tensions and the timing of a US interest rate cut, if any.
'The market sentiment isn't good. Last year, about 80% to 85% of IPOs performed well post-listing.
'This year, it's the complete opposite – nearly 80% have traded below their offer prices,' Tradeview Capital chief executive officer and founder Ng Zhu Hann told StarBiz.
'So, what changed? Largely, to me, it is – of course – market fatigue, fund flows, and also because the global situation has made a lot of investors, whether local, institutional, foreign funds or even local retail investors, very risk-averse.
'A lot of people are holding on to their cash rather than participating in the equity market.'
Domestically, Ng said a lacklustre corporate earnings season has added to investor caution. To-date, 28 companies have been listed on Bursa Malaysia this year, with Paradigm Real Estate Investment Trust making its debut yesterday.
Another three are expected to list by end-June – Ping Edge Technology Bhd (June 13), Cuckoo International (M) Bhd (June 24) and Pan Merchant Bhd (June 26) – bringing the first-half total to 31 IPOs.
This puts Bursa Malaysia slightly past the halfway mark of its full-year target of 60 IPOs, but Ng warned that delays and repricings suggest growing caution among potential debutants.
'We've already seen two or three companies pushing back their listings,' said Ng.
'Several IPOs also revised their offer prices downward.'
Cuckoo, which was initially scheduled to list on April 30, deferred its debut to June 24 due to 'near-term market challenges'.
Its IPO price was also reported to have been revised to RM1.10 per share from RM1.29 previously, although this has yet to be confirmed by the company.
Eco-Shop Marketing Bhd, which has since listed, similarly trimmed its IPO price to RM1.13 from RM1.21 before going public.
Whether Bursa Malaysia hits its target of 60 listings this year now depends not just on pipeline readiness – but on whether the broader market gives debutants a reason to come forward.
Across the shore, Singapore is taking a markedly different approach to reinvigorate its equity market.
In February, the Monetary Authority of Singapore or MAS rolled out a bold S$5bil Equity Market Development Programme to boost liquidity on the Singapore Exchange by investing through selected fund managers focused on actively managed strategies targeting local small and mid-cap stocks.
This is complemented by tax exemptions on fund manager income 'derived from funds investing substantially in Singapore-listed equities', a narrowed Global Investor Programme to channel more capital into listed equities, and expanded research grants to improve coverage and investor engagement in the equity market.
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