Following a promising start to the year, the global initial public offering (IPO) market in the first quarter has transitioned into a phase of uncertainty and selectivity. Globally, the first quarter saw a 23% year-on-year decline in the number of IPOs. However, total proceeds surged by 36%, signaling that investors are gravitating toward larger, “IPO-ready” companies with proven earnings power.
While global deal volumes hit a six-year low due to geopolitical challenges and rising energy prices, the Asia-Pacific region — Malaysia in particular — demonstrated notable resilience and a shift toward higher-value listings. As of April 2026, the Securities Commission Malaysia (SC) is in the process of revamping listing requirements to attract high-growth and new economy-type corporations to Bursa Malaysia.
Summary of key proposed revamps to Bursa Malaysia’s listing framework by market/board:
Main Market
The SC aims to position the Main Market for larger, more established companies by increasing entry requirements and streamlining operational rules.
- Profit test – A proposed increase in the latest financial year profit after tax (PAT) from RM6 million to RM15 million and a proposed increase in the three-year aggregate PAT from RM20 million to RM30 million.
- Market capitalization test – Proposal to retain the requirement of a total market capitalization of at least RM500 million based on the issue or offer price and the enlarged issued share capital upon listing.
- Infrastructure project corporation test – Proposal to allow aggregation of qualifying renewable energy projects to meet the RM500 million project cost threshold.
- Proposal to relax the mandatory requirement for positive operating cash flow, allowing companies with high growth or heavy research and development (R&D) to list even if they haven’t yet reached a steady-state cash flow.
ACE Market
The SC aims to reinforce ACE Market as a second board for small and mid-sized corporations and strengthen the board’s role as an incubator for companies with growth prospects.
- Minimum listing period – Proposal to introduce a minimum two-year listing period on the ACE Market before a company can apply to transfer to the Main Market.
- Mandatory transfer powers – The SC is exploring authority to direct a transfer to the Main Market if an ACE-listed company grows large enough to meet Main Market criteria, so that the ACE Market remains focused on small and mid-sized corporations.
- Tightened sponsorship and moratoriums – Proposal to refine the sponsorship period and moratorium rules for promoters to safeguard long-term commitment following an IPO.
The full proposal on the market segmentation review, titled “Public Consultation Paper No. 4/2025,” can be accessed on the SC official website.
Malaysia spotlight: Stability in a volatile landscape
While other regions faced sharp pullbacks, Asia-Pacific remained a primary driver of global IPO proceeds. The region’s performance was bolstered by a significant rebound in China (including Hong Kong) and steady activity in Southeast Asia.
Malaysia continues to be a standout performer in the ASEAN region. Alongside Singapore, Malaysia was one of the only two consistently active exchanges in Southeast Asia during the first quarter. A steady pipeline of mid-cap companies and a strong domestic investor base have kept the Bursa Malaysia resilient, even as other regional neighbors saw a slowdown.
Unlike global markets where many deals were postponed in late first quarter, IPOs on Bursa Malaysia have largely proceeded as scheduled and oversubscription remained a near-constant theme.
Looking ahead
As we move into the second quarter of 2026, the IPO outlook in Malaysia remains cautiously optimistic. However, potential issuers must navigate:
- Evolving listing thresholds and regulatory reform – The SC has proposed raising the minimum annual PAT requirement for Main Market listings from RM6 million to RM15 million, with the three-year aggregate PAT threshold increasing from RM20 million to RM30 million. Companies considering a listing need to have their financial track records meet these tighter benchmarks and should begin preparing well in advance of submission.
- Heightened ESG and sustainability disclosure obligations – Starting FY2026, all Main Market issuers must commence IFRS S2 climate-related reporting, with IFRS S1 general sustainability disclosures following in FY2027. Malaysia is also expected to introduce a carbon tax in 2026 targeting the energy and iron-steel industries. IPO candidates will need to demonstrate a credible environmental, social and governance (ESG) narrative and reporting infrastructure from day one.
- Investor selectivity and the quality-over-quantity shift – Bursa Malaysia is targeting RM28 billion in total IPO market capitalization for 2026, signaling a deliberate pivot toward larger, higher-quality Main Market listings. Issuers must demonstrate not only profitability but also clear post-listing value creation.
- Geopolitical headwinds and tariff uncertainty – Global trade policy volatility, including potential US tariff escalation, continues to weigh on deal timelines and investor risk appetite. While ASEAN may benefit from supply chain diversification, companies must build robust scenario planning into their equity stories to reassure prospective investors.
