Malaysian exchange seeks ways to increase valuation, with the expectation of 50 initial public offerings next year.

According to Bloomberg, the CEO of the Malaysian Exchange, Datuk Mohamad Umar, recently mentioned in an interview that the exchange is considering developing a formal framework for companies to obtain specific targets on indicators such as P/E ratio, ROI, and liquidity through the framework.

According to Bloomberg, like several other Asian countries including Japan, South Korea, and China, Malaysia is undergoing corporate reforms to enhance shareholder returns, boost depressed valuations, and attract more foreign investments.

This move comes amidst a frenzy of IPO activity, with investments flowing into the data center sector, sparking optimism in the local stock market.

Although the Malaysia Exchange does not intend to replicate the Tokyo Stock Exchange's 'name-and-shame' list approach, there is an intention to draw inspiration from similar plans to encourage listed companies to 'take responsibility for enhancing value'.

Mohamad Umar stated that if companies fail to achieve these targets, the exchange will communicate and discuss with their board of directors.

So far this year, the FTSE Bursa Malaysia KLCI has risen by over 13%, making it one of the best-performing markets in Southeast Asia.

At the same time, compared to the same period last year, the average daily trading volume on the Malaysian exchange in the first half of this year increased by 66.8%.

On the other hand, Mohamad Umar disclosed that the Malaysia Exchange's target for initial public offerings (IPOs) in 2025 is 50 companies, compared to the planned 42 companies for this year.

He added that next year there is a "healthy pipeline for listing," including some large enterprises from the medical care and telecommunications sectors.

It is reported that regulatory agencies have committed to shorten the IPO application process time from six months to three months to promote more listing activities.

If this trade is realized, it will become the largest IPO in China since 2017.

In addition, he expects more companies from the region including Singapore to seek dual listing or financing in China, which will enhance the visibility of Malaysian stocks.

"Malaysian companies have been performing well and continuously improving. We just want to maintain this momentum, which not only excites investors but also fills those companies seeking listing with anticipation."

As of the end of September, the Malaysian exchange has welcomed a total of 39 new listed companies this year, with 7 on the main board, 31 on the Growth Enterprise Market (GEM), and 1 on the LEAP market.