Thursday, September 28th, 2017
WASHINGTON, Sept 28 — US Treasury Secretary Steven Mnuchin said today that President Donald Trump’s proposal for a cut in the corporate income tax rate to 20 per cent was “not negotiable.” “The president’s number one issue that is…
TORONTO, Sept 28 — Canada’s BlackBerry Ltd reported a stronger-than-expected quarterly profit today after sales at its high-margin software unit hit a record, boosting investor confidence in its turnaround strategy and sending its shares up…
PETALING JAYA: The Leading Entrepreneur Accelerator Platform (LEAP), which is set to see its first listing next Tuesday, is unlikely to see initial listings testing the complaisant nature of the new market’s rules yet, as one industry player pointed out, bridled by the nature of current small and medium enterprises and investors mindset.
The listing requirements for the LEAP market are less stringent than for the other two markets in terms of company track record, focusing more on the future prospects of the enterprise.
A case in point is the market’s first listing, Cloudaron, which under its founder Ong Chang Jeh has been around since 2010. It has a presence in Singapore, Indonesia and Malaysia and has total assets of RM58 million. For the financial year ended March 31, 2017, the company made a net profit of RM5.2 million, 3,818.2% higher than the RM126,000 made for the same period in financial year 2016.
A senior capital market player who spoke to SunBiz on condition of anonymity said while the requirements on paper for the LEAP market are very lenient, ideally companies opting for listing are those which already have a track record, and are in the “toddler” stage of growth rather than at infancy level.
“Some of the companies we look through, they are very much new startups. The guideline doesn’t say you must have been in operation for three to five years like (that for) the ACE Market. But it doesn’t mean you have a business venture that you started but you have not even generated sales or profits, you are ready for the LEAP market because this is not innovative SMEs like Silicon Valley,” he said.
“We usually look at historical business revenue to show that you (companies) have already commercialised your products. You’ve already manufactured your products and have a bit of profitability to show you can grow with (capital) injection,” he added.
He opined that Malaysian investors are also not used to investing in “real” startups compared to investors in the Silicon Valley, which is also the reason why Multimedia Super Corridor-status (MSC-status) companies have struggled to raise money in the past – hence the need for a track record.
The banker said evaluating a LEAP market listee is, however, easier compared to the ACE and the Main markets, as most SMEs only have a single core business but the former two may have four or five core businesses.
The size of the company, the industry it is functioning in and the experience and history of the individual manning the business are among the areas of scrutiny.
DWA Advisory Sdn Bhd managing principal Datuk Wan Asmadi Wan Ahmad, however, said even startups or ventures which are on the drawing board level can list, as long as they possess growth prospects and have the ability to sustain themselves.
“In terms of eligibility of listing of SMEs on Bursa Securities, we would need to look at numerous things. Among them, we would be looking at sustainability of the businesses,” he added.
Unlike the ACE and the Main markets where established businesses are listed, the LEAP market looks at businesses that have the potential to grow but have not charted their growth story yet.
“For example, if the company is involved in a certain business that we know that there would be a good market for that type of product/service/business and that the market is still relatively untapped, then there would be a possibility that this specific company could actually grow regionally rather quickly – but may have some funding requirements that it would need to address first,” he added.
Adding on, senior principal Farid Rahman said companies should have the intention to grow as the LEAP market is seen as a gateway to accessing more capital.
He added that it is important for companies to have a vision to eventually graduate to the other two boards instead of remaining in their comfort zone.
Wan Asmadi opined that institutional investors should treat the LEAP market as a pre-initial public offering (IPO) and look to participate more in it. He noted that the participation of institutional investors is limited in the ACE Market as well.
“At this moment, while it is still rather preliminary, we foresee more participation from private investors as we have been made to understand that various fund managers and government-linked investment companies/agencies currently do not have blanket mandates for equity investments into this class of assets,” he said.
“As we progress, we hope institutional investors would have an allocation to invest in LEAP market companies and would see LEAP market companies as pre-IPO companies for investment and as an asset class, where the investors will get the upside upon their migration to the ACE and Main markets,” he added.
According to Wan Asmadi, the LEAP market serves as a “feeder” or interim market which could possibly enable companies to skip the ACE Market and head directly to the Main Market.
PETALING JAYA: Berjaya Corp Bhd (BCorp) saw a lower pre-tax profit of RM62.25 million in the first quarter ended July 31, 2017 compared with RM71.61 million a year ago, mainly due to lower contribution from the property investment and development business as the remaining units of a property project in China had been disposed of in the previous financial year.
It also registered a lower revenue of RM2.20 billion in the current quarter compared with RM2.22 billion in the corresponding quarter of the previous year.
The conglomerate said in a statement that the higher pre-tax profit recorded by the marketing of consumer products and services segment was mainly due to the higher earnings contribution from the motor distribution business, in tandem with the higher revenue achieved.
The retail distribution business, however, continued to incur losses as a result of weak consumer spending sentiment and unfavourable foreign exchange rates.
Meanwhile, the higher pre-tax profit registered by the restaurants and cafes business was underpinned by additional cafes operating. The hotels and resorts business reported a higher pre-tax profit mainly due to contribution from a new hotel.
For the gaming business, its higher pre-tax profit was driven by lower prize payout.
“Given the prevailing economic conditions and global financial outlook, the directors are of the view that the group’s operating environment will be challenging going forward,” BCorp said.
BCorp closed 2.9% higher today at 35.5 sen with 13.7 million shares traded.
SINGAPORE, Sept 28 — Middle East Opec producers are concerned weak demand and excess supply in the first quarter of 2018 may undermine an oil price rally that has pushed Brent crude about 30 per cent higher since June, Opec and industry sources…
KUALA LUMPUR, Sept 28 —The sole official importer and distributor of Ferrari in Malaysia, Naza Italia Sdn Bhd, has invested RM2.8 million in the development of the 3,115 square feett second Ferrari City Showroom at Naza Platinum Park. Naza…
BEIJING, Sept 28 — At Prada’s Spring/Summer 2018 show in Milan last week in a warehouse papered with giant pop-art comic strips, one name in the coveted front row stood out: Tao Liang, otherwise known as Chinese blogger ‘Mr Bags’. His…
PETALING JAYA: Amcorp Properties Bhd (AmProp) proposes a renounceable rights issue of new class B redeemable convertible preference shares (RCPS B) to raise gross proceeds of up to RM597.2 million.
The company is undertaking the proposed rights issue to raise funds for the group to finance the existing and future property development projects and investments, including those undertaken through its joint ventures, to partly repay bank borrowings and for working capital requirements.
Amcorp said the exercise will further strengthen the company's capital base and improve its gearing level; minimise the immediate dilutive effect on the basic earnings per share of the group, as the RCPS B is only expected to be converted over a period of time after the first anniversary of the issue date of the RCPS B.
It also provides the entitled shareholders with an opportunity to further increase their equity participation in the company via the option to convert the RCPS B held by them into new AmProp shares at a predetermined ratio.
Amcorp also noted that the issuance of RCPS B would also enable the company to achieve the minimum subscription Level via its major shareholder's undertaking without resulting in a breach of the minimum public shareholding spread requirement under the Main Market Listing Requirements of Bursa Securities.
The proposal is expected to be completed by the first quarter of 2018.
AmProp closed 0.63% higher at 79.5 sen on Thursday with 24,900 shares traded.
PETALING JAYA: GFM Services Bhd has entered into a collaboration agreement with UDA Holdings Bhd to provide facility management consultancy services for the Bukit Bintang City Centre (BBCC) Project in a RM1.36 million contract.
The project value is to be shared between the parties, where UDA will have a 45% stake, while GFM 55%.
The principal activity of UDA is provider of facility management services.
GFM shares closed 0.83% higher at 61 sen on Thursday with 385,100 shares traded.