'Consider the listing cost before you LEAP'

KUALA LUMPUR: Corporates that plan to go for a listing on the Leading Entrepreneur Accelerator Platform (LEAP) Market are advised to take the cost of the exercise into consideration as it could come to about RM700,000, said CIMB Investment Bank Bhd’s regional head of financial solutions, Datuk Christopher Chan. The cost, however, is not standard but unique to the case of each potential listee.

Speaking at a seminar on the LEAP Market listing organised by The Associated Chinese Chambers of Commerce and Industry (ACCCIM), Chan said Bursa Malaysia has taken the initiative to reduce the cost by trimming the requirements, such as the need for independent directors, among others.

As at June 2017, some 11 small and medium enterprises (SMEs) have expressed their keenness to list, according to information from Deloitte Corporate Advisory Services Sdn Bhd.

SMEs in various stages of growth, including start-ups, can opt to list on the LEAP market, on condition that they assume public limited status and are incorporated in Malaysia.

According to Chan’s rule of thumb, a company suitable for listing on LEAP is one that could generate RM4 million to RM5 million in net profit within three to five years upon listing.
The company will need to go through due diligence conducted by advisers and sponsors, who will assess its suitability to be listed.

A listee is required to have a sponsor for at least three years upon listing. The role of a sponsor is also to ensure ongoing compliance with listing rules and regulations after listing.

The LEAP market is only open to sophisticated investors such as high net worth individuals, with more than RM3 million in personal assets excluding primary residence or a gross income of more than RM300,000 a year. Besides that, it is open to corporate bodies with more than RM10 million in assets under management.