Executive Chairman of KLSE Dato' Mohd Azlan Hashim said Sarawak has been very successful in developing the manufacturing and industrial sectors.
"However, the potential of Sarawak is not yet fully discovered and realised.
"With strategic infrastructure development, together with the on-going commitment of the Federal and State Governments to the development and industrialisation of Sarawak, coupled with an encouraging research and development environment, all augurs well for Sarawak.
"Therefore, we would like to encourage businesses and industries based here in Sarawak to get to know the MESDAQ Market better," he said.
Mohd Azlan was speaking at the Going Public on the MESDAQ Market seminar in Kuching today. The seminar was officiated by YB Tan Sri Datuk Amar Dr. George Chan Hon Nam, Deputy Chief Minister of Sarawak on behalf of Chief Minister of Sarawak YAB Pehin Sri Dr. Haji Abdul Taib Mahmud. The seminar was attended by over 200 representatives of the business community including those from the high growth and technology sectors based in Sarawak.
Mohd Azlan said it is timely that the seminar is held in Kuching. The federal government has emphasised the development of Sarawak in the recent budget 2004, with the RM 5.5 billion investment for development in the state to broaden access and expand networks both within Sarawak and to the outside world. The tax incentives given to companies in Sarawak will facilitate re-investments in further expansion and development whilst the State Government is actively encouraging technology driven industries and encouraging research and development in the state.
"Clearly, the foundation has been laid and the infrastructure are in place for businesses and industries in Sarawak to grow, expand, create global brands with first mover advantage whilst leveraging on technology and emphasizing research and development," he said.
Mohd Azlan added the performance of the MESDAQ market since its consolidation into the KLSE Group in March 2002 has been very encouraging. From only 5 listings in the first 3 years of operations to March 2002, there are now 25 companies listed on the MESDAQ Market.
"We expect this number to increase significantly this year, as there are currently another 15 companies approved for listing with many more applications being processed.
"From market capitalisation of about RM260 million before consolidation with KLSE, the market capitalisation of MESDAQ market is now close to RM 3 billion as at market close yesterday on 20 October 2003.
"In terms of funds mobilised or capital raised, since its merger with the KLSE in March 2002 to September 2003, over RM270 million has been raised," Mohd Azlan said.
Mohd Azlan said Sarawak has significant potential, judging from the size of its economy.
"However currently only 28 out of 891 companies listed on the KLSE are from Sarawak, representing 3% of public listed companies in Malaysia. Market capitalisation for these Sarawak companies stand at RM9.56 billion or 1.56 % of KLSE's total market capitalisation of RM613.12 billion as at 20 October 2003.
"We hope after the seminar today, and the encouraging turn-out we have here this morning, KLSE will also see many more Sarawak companies going public, perhaps even on the MESDAQ market," he said.
Mohd Azlan said listing on the MESDAQ Market offers benefits not only for the listed companies, but for investors and venture capitalists in Sarawak.
For the investor, companies listed on the MESDAQ Market allows the investor entry into the company at an early and more exciting stage of their development whilst providing a highly viable option for investors who seek to diversify their investment portfolio with technology and high growth stocks.
For venture capitalists, the MESDAQ Market provides a strategic exit mechanism to make their investments more liquid and even realise some investment value, which is important to enable venture capitalists to continue the investment cycle of re-investment of capital.
"The MESDAQ Market therefore also serves as an important component of the venture capital industry and institutional investing," Mohd Azlan added.
Mohd Azlan said the seminar will update participants on matters of raising capital, in particular via the MESDAQ Market.
"With practitioners and regulators discussing a range of relevant topics on raising capital, this seminar is indeed an excellent opportunity to clarify issues and address concerns for businesses to raise capital for further growth and expansion," he said.
Mohd Azlan said some common misconceptions about the MESDAQ Market is that it is only for small companies, that it is only for technology companies and that it is a Third Board of the KLSE.
The MESDAQ Market is not only for small companies. Although the minimum issued and paid-up capital required for listing on MESDAQ Market is RM 2 million, there is no ceiling to the issued and paid-up capital requirement. The MESDAQ Market is able to cater for large companies, in terms of size of capital - even those which may qualify for a Main or Second Board listing, but prefer instead to be listed on MESDAQ Market.
The MESDAQ Market has also been established to cater to the fund raising needs of technology and high-growth companies.
Mohd Azlan said for purposes of the MESDAQ Market, technology companies are not mere users of technology but developers of technology with the technical capabilities to research and develop new technology, processes or equipment.
This includes a broad spectrum of companies that commit substantially to research and development, companies with intellectual property, companies that own new technology, companies that build brands, companies with niche markets, companies with substantial exports in non-traditional areas, companies with substantial foreign earnings, companies that contribute significantly to national development in technology.
With respect to high growth, Mohd Azlan said for the MESDAQ Market, high growth companies can either be in technology or non-technology areas . High growth companies are companies that have an outstanding business model, a unique product, a diversified market and client base for the product, perhaps in an industry that has high barriers of entry - in short a company that has a high degree of potential to grow and expand.
On another common misconception, Mohd Azlan said the MESDAQ Market is not a Third Board of the KLSE. The Listing Requirements of the MESDAQ Market are separate and different from the Main Board and the Second Board. The MESDAQ Market caters to the niche segment of technology and high growth companies seeking the unique and strategic profiling that the MESDAQ Market can accord them.
"The KLSE today serves over 3 million investors from over 100 countries. A public listed company will therefore continue to have the attention of not only the broad investor base but also financiers, fund managers, business partners - in fact, the target audience needed for public listed companies to grow and progress further," Mohd Azlan said.
Mohd Azlan added moving forward, the outlook is very encouraging for the MESDAQ Market.
