Good day everyone, with Bursa getting a hive of activity on IPO listings, here we come for a new board which could potentially list more companies than ever on Bursa for the Malaysia Small, Medium and Enterprise Corporation (SME) companies. For everyone's benefit, LEAP stands for Leading Entrepreneur Accelerator Platform (LEAP) Market. This market is introduced in order to tackle the fund raising issues that are currently being faced with SME companies wanting to go for a listing on Bursa to raise capital and potentially open up to newer markets.

Because most industry experts and the Ministry of International and Trade and Industry (MITI) are anticipating a vast number of potential listings over the coming years (probably hundreds) with limited investors participation and with the SME industry rapidly growing in Malaysia, it will be best to create only a single topic integrating all the potential and past listings of LEAP IPOs here so as not to litter a lot of and presumably abandon topics that may be left out post-listing. Probably the first few IPOs on LEAPS may get some media coverage but not anticipating that all companies will get the spotlight so it will be best to conserve some space here. In the next post, I will reserve a list of past or current LEAP IPOs and after a company have achieved the listing status on Bursa, it will be achieved with the page numbers listed there. I'll try my best to update the topic as frequent as possible. If anybody disagree or agree with this, do let me know in the upcoming posts.

So for now, let's introduce as a summary of what the LEAP Market is about and what are the criteria for listing:

Who can participate?

Unfortunately, unlike both Main and ACE Market boards and like South Korea's KONEX, this board is specifically only for sophisticated investors only. What do they mean by "sophisticated investors"? Basically High Net Worth Investors or HNWI are only allowed to secure allotments and trade on the market. Those who can go private placements are HNWIs and are likely eligible to participate in this market. This is accredited under Schedule 6 and 7 of the Capital Markets Services Act 2007 which can be referred here:

Link: https://www.sc.com.my/wp-content/uploads/en...full_121228.pdf

Now a lot of people have been asking here what are the criteria for being a "sophisticated investors" or "high net worth individuals (HNWI)", I'll say it once here,

The offer or invitation made to an individual only if:

a) The total net personal assets, or total net joint assets with his or her spouse,
exceed three million ringgit or its equivalent in foreign currencies, excluding
the value of the individual’s primary residence;

b) The gross annual income exceeding three hundred thousand ringgit
or its equivalent in foreign currencies per annum in the preceding twelve
months; or

c) Jointly with his or her spouse, has a gross annual income exceeding four
hundred thousand ringgit or its equivalent in foreign currencies per annum in
the preceding twelve months

And even without the high level barrier of entry, this market is very likely to be volatile and also at high risk as the stocks are more likely to be illiquid due to the absence of the general market and therefore is treated as an "exclusive market for the sophisticated". However, there are special exemptions to this rule which includes anyone who is an employee and is offered shares by the company itself. Other non-affiliated parties are not allowed to participate in the board.

What are the criterias and ways to issuing shares?

This board does not necessary require the approval from the SC. However, like all other boards, the bourse has the final say on whether to allow the company to list on Bursa or getting the application rejected. In addition, they must be a public company that is incorporated in Malaysia and must apply via an Approved Adviser. The shareholding spread must maintain at least 10% of the sum of ordinary shares for the public shareholders at admission.

There are a number of avenues the company can choose to offer shares by;

1) Either issuing new shares or listing existing shares by way of introduction.

2) The traditional way (Public offer, private placements, bookbuilding etc)

3) Sale of shares by promoters (Only possible if the company generates 1 full financial year of operating profits, registered with the Securities Commission, promoter's shareholding is to be placed under moratorium on at least 45% of the enlarged number of issues for the next 36 months after a full 1 year post-listing)

As for timetable of the IPO, stock ticker, ISIN, stock code, same rules apply on Bursa. The company also must apply the IPO via an advisor is not allowed to list on their own.

Ways of which the company must disclose the informations

Most of the rules retain about the same. However, there is a significant difference from the both boards is that a company is required to announce their financial results to Bursa, semi-annually and allow their financial statements to be audited annually. Any corporate news and information must be immediately to the public as per usual. For the LEAP Market, do be aware that there is no profit track record required for SME companies and this may in turn, be subjected to large swings in share prices be it very positive or very negative. However, failure to comply with the submission of the financial reports, the companies will be subjected to suspension and possible delisting procedures taking into effect.

Also, do bear in mind that only an information memo is required and that prospectus is not required for this board. Therefore, investing decisions like this may be difficult and may result in losses.

Basically, that is all for the topic. I'll update more changes to the policy of LEAP Market should they do as per so. As stated earlier, I'll post a list of companies that are going for listing and already listed IPOs below.

More from: http://www.bursamalaysia.com/misc/system/a..._FAQ_150617.pdf

UPDATE (25/7/2017): With today's launch of the Leap Market, Bursa has created a new page showcasing the overview of the new market and listings bound to approach the board.

Link's below: http://www.bursamalaysia.com/market/leap/

Source: Bursa Malaysia

This post has been edited by ILoveLalat.net: Jan 16 2019, 08:11 PM

Current Listings:
- Baba Eco Group Berhad [TBA, IPO: 13 sen]

Past Listings:
- Cloudaron Group Berhad (03001) [3 October 2017, IPO: 11 sen, closed at 16.5 sen]
- Red Ideas Holdings Berhad (03002) [8 November 2017, IPO: 35 sen, closed at 43.5 sen]
- JM Education Group Berhad (03003) [8 February 2018, IPO: 45 sen, closed at 53.0 sen]
- Metro Healthcare Berhad (03005) [26 February 2018, IPO: 23 sen, closed at 30.0 sen]
- Nova Pharma Solutions (03006) [9 March 2018, IPO: 20 sen, closed at 22.5 sen]
- Polymer Link Holdings (03007) [27 April 2018, IPO: 12 sen, closed at 17.0 sen]
- SL Information Berhad (03008) [21 May 2018, IPO: 18 sen, closed at 23.0 sen]
- Seers Berhad (03009) [17 July 2018, IPO: 8 sen, closed at 10.0 sen]
- Amlex Holdings Berhad (03011) [25 September 2018, IPO: 15 sen, closed at 16.0 sen]
- MyKris International Berhad (03010) [4 October 2018, IPO: 20 sen, closed at 22.5 sen]
- Topvision Eye Specialist Berhad (03013) [21 November 2018, IPO: 18 sen, closed at 23.0 sen]
- CRG Incorporated (03016) [28 November 2018, splinter from Bonia, closed at 3.0 sen]
- Manforce Group Berhad (03015) [11 December 2018, IPO: 18 sen, closed at 23.0 sen]
- Uni Wall Aps Holdings (03017) [15 January 2019, IPO: 16 sen, closed at 22.0 sen]
- Supreme Consolidated Resources (03018) [16 January 2019, IPO: 50 sen, closed at 62.0 sen]


Companies Interested In Listing:
- Accent Wellness Global Sdn Bhd
- Agrofresh International Group Sdn Bhd
- East West One Group Sdn Bhd
- Macfeam Sdn Bhd
- ProEight Sdn Bhd
- Safetyware Sdn Bhd
- Trustgate Berhad (Associate company of Managepay Systems, MPAY)
- Upstream Downstream Process & Services Sdn Bhd
(There are 15 others awaiting listing on LEAP, many more to come)

This post has been edited by ILoveLalat.net: Jan 16 2019, 08:10 PM

Basically an executive summary of the LEAP Market, just got featured on The Star today.

Bursa's new platform for small firms to seek listing

PETALING JAYA: The stage has been set for the setting up of the Leading Entrepreneur Accelerator Platform (LEAP) following an announcement by Bursa Malaysia on new listing requirements and amendments to some of its regulations.

This is good news for the approximately 19,000 small and medium enterprises (SMEs), who will now have a new avenue to raise funds via the capital market in an efficient manner.

In a nutshell, the LEAP market will be the “feeder” market for an SME seeking for a listing. The LEAP platform will provide them with fund raising access and visibility through capital markets.

Currently, 96% of SME funding comes from the banking sector, an indication of its dependence on financial institutions for its needs. Less than 4% comes from the capital market.

“This marks a significant milestone for Bursa Malaysia. The LEAP market complements both the Main Market and ACE Market by addressing the funding gap faced by the SMEs.

“As the national exchange, we believe the exchange can play a greater developmental role to facilitate fund raising for the growth of SMEs,” said Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan in a statement.

MIDF Amanah Investment director of corporate investment banking Sherilyn Foong said there were many SMEs that lacked the criterias to qualify for an Ace Market listing just yet.

“The LEAP market will be the intermediary market where the company can be listed first while providing all the capital access and regulations required of a company preparing for a proper listing,” she said.

The LEAP market is part of a larger ecosystem created by the regulators which began with the implementation of the equity crowdfunding (ECF) platform two years ago. ECF was to be the first platform, followed by the LEAP, and subsequently a graduation to the Ace Market and Main Market.

The ECF was implemented so that SMEs and start-ups could raise funding through monetary contributions from a large number of people. In less than a year, a total of RM10.4mil has been invested in 14 companies via these platforms.

However, liquidity is an issue in the ECF market. Thus the setting up of the LEAP market will also allow ECF investors to sell their equity to interested buyers.

On some of the challenges for companies opting to list in the LEAP market, Rakuten Trade research head Kenny Yee said valuations could be lower, given issues with regards to liquidity.

This is because only high net-worth and sophisticated investors are eligible to trade on this platform. Furthermore, there is only a 10% public spread requirement upon listing.
“Initial fees involved are also some of the challenges that SME owners may find daunting. The SME candidates would have to go through the steep learning curve of profiling and proving their growth story for their fund raising journey,” said Foong.

So what sort of company qualifies for LEAP?

It is open to all Malaysian SMEs which are public companies. No profit track record and operating history is required. For its submission, an information memorandum will suffice. No prospectus is needed.

Nonetheless, the public spread of the shares must be equal to or more than 10% at listing. There is no requirement to maintain any minimal public spread post-listing.

For now, though, trading on the LEAP market is limited only to qualified investors – mainly those that are known as sophisticated investors. This includes a venture capital corporation, venture capital management corporation, private equity corporation and private equity management corporation registered with the Securities Commission.

On this note, LEAP will provide an efficient and transparent venue to spur investment activities by venture capital and private equity firms as well as other sophisticated investors.

On the sort of businesses, the issuer of the company must have an identified core business. It cannot be an investment holding corporation with no immediate or prospective business operations or an incubator company.

Admission of the company to the LEAP board will be via fundraising or introduction.

For the first year, the entire shareholdings of the promoters are under moratorium. Starting from year two, the promoters must at least maintain a 45% stake.

The LEAP bourse is something which is also being done in Hong Kong.

The Hong Kong stock exchange published last Friday a long-awaited proposal to introduce a new board for pre-profit companies and issuers with non-traditional corporate governance structures in a bid to attract foreign issuers who have typically chosen New York over the Hong Kong bourse.

The new board would exclusively list “new economy” companies in sectors such as Internet and biotech, with separate segments for start-ups and established companies, the bourse said.

Source: The Star

Link: http://www.thestar.com.my/business/busines...zdUAFfFhpOok.99

When is the first IPO expected?

I am curious to the cost of listing on LEAP, any idea?

What is cost for:
Advisors/underwriters?
Lawyers?
IMR?
Bursa
SC?
Printing IM?
Miscellaneous costs

If one tries to raise say RM10m and listing on LEAP costs RM1m or even RM500k, it is quite a shitty deal no?

I am curious is there an overlap with the equity crowdfunding?
both targeted SmE

So far, I don't see any quantitative amount for LEAPS yet. But it will most likely be priced lower than what companies pay for if it's listing on the Main or ACE Market.

As for the second part, the RM10 million would have include listing fees. But usually if companies go for listing, and its listing fees is more than say 10 percent, it would probably be a turndown for the company wanting to expand its business.

This one's targetted to HNWIs and also involves with shares floated on the exchange. Those involve with smaller equity crowdfunding, usually it's open to all.

true, but from issuers perspective, they are quite similar.

from investors, then unless you are HNSIs, you can only involve with ECF.
But if I am HNSI, i wold definitely prefer LEAP than ECF, which still a lot of loop holes.
Those listed in ECF are mostly not serious in reporting or make announcement to their investors. We can see a lots of craps still get funded in ECF

Follow.

Leap market definitely better. At least a market where shares can be traded.. although participant is sophosticated.. still a better market than ecf

More news on the LEAP Market

http://www.thestar.com.my/business/busines...aith-with-smes/

launch date: 25 July 2017

I guess that is when the IPO applications can start to come in.

This post has been edited by Cubalagi: Jul 15 2017, 02:29 PM

I dont know about LEAP costing, but if you look at the last ACE Market IPO Intan Bina:

IPO proceeds of RM26.76 million
RM3.2 million was to pay for listing fees.

That is equal to 12% of the funds raised. Means companies are willing to pay that much to be listed.

Agree, professional fees will be the same for ace/main market. Big difference is from underwriting. If LEAP is going to need similar professional fee, it will not work.

Then again if you don't need profit track record I'm assuming you don't need accountants. So how much IB willing to charge for information memorandum? Lawyers needed? Co sec, IMR etc?

I have no idea how much all these fees are. I was responding to your statement saying that its "quite a shitty deal". Its not.

Using your example, raise RM10 million and pay RM1 million in fees. I bet many SMEs will be willing to take that. The RM10 million is not a loan. No need to pay interest and even the principal back.. ever. Plus you get the benefits of being a "listed company" ... your creditors more confident with u, u can give share options to staff, can raise more capital via rights etc. Only now you have to deal with "minority shareholders".

You forget the continuous cost of being listed - monetary and strict guidelines.

Plus one cannot compare LEAP to the 10% example of funding cost of Main or Ace and think it is still a good deal. It is still not "listed" as it is not accessible to everyone. You are still illiquid and at the mercy of Bursa and SC.

My point is that for LEAP, cost has to be much lower, there is no guarantee there will be takers for your IPO and likely no underwriters. Sure you can say you want to raise 10m for 1m cost, but can any SME looking to raise 10m be able to afford to BURN 1m if the thing fails (i.e. no one subscribes or you get only 1m fresh funds)?

This post has been edited by CcL: Jul 16 2017, 08:15 AM

So sorry, was away for a long time cause I have very important commitments to do. The LEAP platform is already been set up but I guess the real date will be next Tuesday.

Bursa approves six new advisers for Leap Market

Source: The Star

Link: http://www.thestar.com.my/business/busines...or-leap-market/

And also from The Edge, Prime Minister Datuk Seri Najib Razak will be launching the Leap Market at the opening of the annual Invest Malaysia Kuala Lumpur event on July 25 which is next Tuesday. Maybe we can see new listings by then?

This post has been edited by ILoveLalat.net: Jul 20 2017, 06:17 PM

First announced listing for the LEAP Market!

http://www.bursamalaysia.com/market/listed...cements/5494101

More news: http://www.thestar.com.my/business/busines...-on-bursa-leap/

Source: Bursa Malaysia and The Star

This post has been edited by ILoveLalat.net: Jul 24 2017, 02:01 PM

Seems a simple crowdfunding need just become sophisticated and higher costly. Next is ban all crowdfunding platform or form them to comply with LEAP?

This post has been edited by nova80: Jul 25 2017, 12:21 PM

I hope not. But if they do want to "ban" equity crowdfunding, may we suggest that LEAP opens to the general public since only HNWIs are only allowed to participate.

Two Edge articles on the coverage of today's LEAP Market launch,

Link 1: http://www.theedgemarkets.com/article/pm-n...-malaysian-smes

Link 2: http://www.theedgemarkets.com/article/onwa...-starting-young

Source: The Edge