The ACE Market is a vital platform for established companies and emerging firms aiming to go public without the stringent profit requirements imposed by the Main Market. Designed to support high-growth companies, it offers a flexible and adaptive listing framework that facilitates access to capital while emphasizing growth prospects over historical financial performance. This market attracts sophisticated investors seeking promising opportunities in a sponsor-driven environment, where companies benefit from expert guidance throughout the listing process.
By providing greater visibility and credibility, the ACE Market enables businesses to accelerate their expansion and innovation efforts effectively. For a comprehensive understanding of the process and benefits, this article delves into the ACE Market’s structure, eligibility criteria, listing procedures, and showcases real-world success stories and market trends.
Key Takeaways
The ACE Market provides an adaptable listing framework for high-growth companies, eliminating minimum profit requirements that are barriers in other markets.
Companies must meet specific eligibility criteria, including having a defined core business, securing a sponsor for at least three years, and demonstrating sufficient working capital.
Sponsorship is crucial in the listing process, offering guidance and support to ensure companies meet regulatory requirements and align their business strategies with investor expectations.
Overview of the ACE Market
The ACE (Alternative Capital Exchange) Market, a dynamic segment of Bursa Malaysia, serves as a vital stock exchange platform designed for high-growth and emerging companies that may not yet meet the stringent financial benchmarks of the Main Market. By prioritizing growth potential over historical profits, this adaptable market framework attracts innovative firms seeking to access public funding and sophisticated investors willing to embrace higher risks for promising returns.
Positioned as a leap market, the ACE Market effectively bridges the gap for companies aiming to scale their operations and secure essential capital, making it an indispensable avenue for local businesses focused on expansion and development within the Malaysian capital market ecosystem.
Key Benefits of Listing on the ACE Market
One of the most compelling advantages of listing on the ACE Market is the elimination of minimum profit requirements, which often serve as a significant hurdle in other markets. This unique feature enables high-growth companies to access public funding without the necessity of an established profit history, thereby supporting their uninterrupted profits, expansion, and innovation.
For small and medium-sized enterprises (SMEs), the ACE Market presents a valuable opportunity to raise substantial capital that can be strategically deployed into growth initiatives such as research and development, market expansion, and infrastructure project development. Listing on the ACE Market also significantly enhances a company’s visibility and credibility within the market of Bursa Malaysia. This heightened profile attracts not only customers and potential business partners but also sophisticated investors, creating a positive cycle of growth and development.
The transparency and regulatory rigor required for ACE Market listings further bolster investor confidence, facilitating better access to additional funding in the future. Moreover, a presence on the ACE Market strengthens a company’s market positioning and branding opportunities, which are crucial for long-term success.
This elevated market presence often leads to increased opportunities for strategic partnerships and collaborations, driving further growth and solidifying the company’s foothold in its industry. Importantly, companies are expected to demonstrate strong operating revenue to sustain their growth trajectory, ensuring they meet the expectations of both investors and regulators alike.
Eligibility Criteria for ACE Market Listings
To qualify for the ACE Market, companies seeking to list must satisfy both quantitative and qualitative listing requirements. A clearly identifiable core business is essential to demonstrate a focused and coherent strategy. Equally important is securing a sponsor for the first three years post-listing, as the ACE Market operates as a sponsor-driven platform, ensuring companies maintain compliance and a strong growth trajectory.
Additionally, businesses must show sufficient working capital for at least 12 months from the date of the prospectus and meet the minimum public spread requirement, with at least 200 public shareholders holding a minimum of 100 shares each. Maintaining a healthy financial status is also critical to fulfill the comprehensive eligibility criteria for a successful listing on the ACE Market.
The Listing Process for ACE Market
The journey to listing on the ACE Market begins with submitting a comprehensive application to the stock exchange of Bursa Malaysia. This initial step lays the foundation for a rigorous yet streamlined process, requiring detailed documentation and strategic planning to meet the market’s standards. A well-prepared application ensures that emerging companies can effectively showcase their business potential and growth prospects to investors.
Central to this process is the involvement of sponsors, whose expertise is indispensable in guiding companies from the initial application through to the final listing. These sponsors provide critical support, ensuring compliance with regulatory requirements and assisting emerging companies in navigating the complexities of the ACE Market.
Their role is pivotal in aligning the company’s operations and governance structures with the expectations of the stock exchange and sophisticated investors. Additionally, preparing and registering a detailed prospectus is a crucial milestone. This document transparently presents the company’s business model, financial health, risks, and growth strategy, enabling investors to make informed decisions.
Companies must also meet the public spread requirement and demonstrate operational readiness, including strong corporate governance, to ensure a seamless transition to a publicly traded entity. While the process demands diligence and coordination, the streamlined approval for IPOs on the ACE Market makes it an attractive avenue for emerging companies seeking capital and visibility on Bursa Malaysia.
Role of Sponsors in the ACE Market
In the ACE Market, sponsors play a pivotal role as the foundation of the listing process, leveraging their expertise to thoroughly assess a company’s core business and growth potential. Acting as trusted advisers, they guide companies through initial public offerings and fundraising activities, ensuring alignment with the rigorous standards of this sponsor driven market.
Their involvement not only facilitates a smoother transition into the capital market but also enhances investor protection by verifying that all ACE Listing Requirements are met. This tailored, hands-on approach empowers businesses to navigate market complexities confidently while aligning their strategic objectives with investor expectations.
Common Challenges and How to Overcome Them
Regulatory compliance represents a significant hurdle for companies aiming to list on the ACE Market, given the rigorous documentation and audit requirements involved. However, these challenges can be effectively managed by engaging expert advice and dedicating appropriate resources to ensure meticulous and accurate preparation. Mastering these compliance demands is essential for a successful listing on Bursa Malaysia, paving the way for companies to access capital markets and unlock growth opportunities.
Case Studies of Successful Listings
99 Speed Mart executed the largest IPO in seven years on Bursa Malaysia, raising RM2.36 billion and underscoring the robust investor appetite for retail sector listings. This landmark achievement not only highlights the Main Market’s capacity to facilitate substantial capital raises but also demonstrates how companies can leverage this platform to attract sophisticated investors while preparing for potential future uplisting to the Main Market. The success of such high-profile IPOs reflects the growing confidence in companies that exhibit strong growth prospects and sound financial fundamentals.
Similarly, ACO Group Berhad, a distributor of electrical products, successfully raised RM16.2 million during its ACE Market IPO in March 2020, with the offering oversubscribed by 15.53 times. These cases emphasize the importance of market readiness and investor interest in driving IPO success. For companies aiming to transition to the Main Market, meeting the aggregate after tax profit requirements remains a critical milestone.
Together, these examples illustrate how businesses can strategically navigate Bursa Malaysia’s listing pathways, maximizing their visibility and capital-raising potential on the ACE Market while positioning themselves for long-term growth.
Recent Trends and Performance of the ACE Market
In 2023, the Bursa Malaysia Market saw:
24 new listings, maintaining consistent activity despite a slight decline from the previous year
The majority of these new listings typically performed well, with only four trading below their initial public offering prices
Significant IPOs, such as Mr D.I.Y. Group and CTOS Digital Berhad, have highlighted the strong investor interest in high-growth companies
The ACE Market Index’s year-to-date change of -2.3% reflects ongoing volatility, but the market remains resilient. Looking ahead, the upcoming year is expected to bring an increase in IPO activity on the ACE Market, driven by anticipated improved market conditions.
Summary
The ACE Market presents a strategic opportunity for high-growth and established companies to access public funding and accelerate their expansion without the stringent profit requirements of the Main Market. By thoroughly understanding the eligibility criteria, listing procedures, and the critical role of sponsors, businesses can adeptly navigate the complexities of the listing process and position themselves for long-term success. This platform not only facilitates capital raising but also enhances corporate visibility and credibility in the competitive landscape.
More than just a funding avenue, the ACE Market serves as a vital stepping stone for companies aiming to transition to the Main Market, offering increased exposure to sophisticated investors and greater market recognition. Embracing the potential of the ACE Market enables businesses to unlock growth opportunities, build a solid foundation, and elevate their market presence to new heights. For a comprehensive guide on the process and benefits, explore the detailed insights provided throughout this article.
Frequently Asked Questions
What is the ACE Market?
The ACE Market serves as an Alternative Capital Exchange tailored for high-growth companies, providing a more flexible listing framework than the Main Market. This makes it an appealing option for businesses seeking to access capital while maintaining growth potential.
What are the key benefits of listing on the ACE Market?
Listing on the ACE Market provides access to capital without minimum profit requirements, which enhances visibility, credibility, and investor confidence. These advantages can significantly bolster a company’s growth opportunities.
What are the eligibility criteria for the ACE Market?
To be eligible for the ACE Market, companies must fulfill specific quantitative and qualitative criteria, including having a clearly identifiable core business, appointing a sponsor for the first three years, and ensuring sufficient working capital.
How important are sponsors in the listing process?
In the sponsor driven market environment of the ACE Market, sponsors play a critical role by expertly guiding companies through the IPO process, ensuring full compliance with listing requirements, and providing strategic advice tailored to each company’s suitability for listing.
This hands-on support is vital in helping businesses navigate regulatory complexities and align their operations with market expectations, ultimately facilitating a successful transition to public trading.
What are some common challenges in listing on the ACE Market?
Regulatory compliance poses a significant challenge when listing on the ACE Market, necessitating extensive documentation and audits. To navigate this effectively, it is advisable to seek professional guidance and allocate adequate resources for thorough preparation.
