Performance of IPO on Bursa Malaysia in 2024 (as of October 2024)

IPO or Initial Public Offering is the sale of a company share before it is listed on the stock exchange such as Bursa and NASDAQ (U.S.). IPO is one of my favourites to invest in although it is not 100% for most of the time, however, I can buy at a lower price if the company is undervalued. For any new IPO investor, it is important to study, understand, and analyse the IPO prospectus thoroughly because it can cause you to lose money if you do not know the intrinsic value. On Bursa Malaysia, there are three (3) boards available for a company to go for but it is required to meet the requirement of each board as set by the stock exchange, and the listing requirement with details are varied accordingly. After reviewing the 2024 IPOs, I found that most of the IPO companies are listed on the ACE market, which is the second board of market in Bursa Malaysia. Out of 36 IPO companies, there are only 7 companies listed on the Main market which are Prolintas, Keyfield, MKH Oil Palm, Feytech, Johor Plantation, Well Chip, 99 Speed Mart, and several LEAP market companies.

Source: Bursa Malaysia & The Edge

Regarding the success rate of IPO, it is undeniable that the recent IPOs had seemed too difficult to obtain the shares, due to the lower allotment amount and higher number of participants. For instance, KHPT Holdings Berhad (Automotive parts manufacturer) was oversubscribed by 124 times, and the transition market from LEAP market to ACE market company, Steel Hawk Bhd recorded an oversubscription of 276.83 times, which was “too hot” for its participation. Looking into the balloting table of Steel Hawk (public category), the average success rate was 6.27% (2,045 / 32,605). Using Tier 8 as an example, the basic required amount to the ballot under this tier is RM3,000 and the allotted amount is 4000 units each unit is priced at RM0.15, thus the total value is RM600. The opening price of Steel Hawk was RM0.300 (100% gain), the lowest price was RM0.290 (93.33%), the highest price was RM0.385 (156.67%), and the closing price was RM0.370 (146.57%). Assuming the IPO investor sold all the shares during the listing date at the average price of RM0.340 (highest price + lowest price / 2), the investor will gain RM760.

The IPO market is an interesting investment option in my opinion. However, there are also some cases when the share of the company opened below its IPO listing price such as DXN, Master Tech, MST GOLF, etc. Every investment has its own risk, consult a licensed financial advisor or conduct your investigation is significant before taking any investment action.

Source: IPO Prospectus of Steel Hawk Berhad

Source: Tricor

Calculation of IPO of Steel Hawk’s Average Gain by using Tier 8 (from 20,000 shares)
Average success rate = 6.27% (2,045 / 32,605)
Average selling price = RM0.34
Expected gain = (RM0.34 – RM0.15) x 4000
                           = RM760
Return on Investment = (RM760 / RM3000) x 100%
                                         = 25.33%

What is your preferred IPO company in 2024? Share your favourites now!

By: Jshen Ng