Raising the bar for Bursa 

AS the focus on the MY Value Up programme by Bursa Malaysia and the Securities Commission begins to sharpen, investors are understandably looking at what sort of inductive influence the initiative can bring to the market as a whole, including for the mid- and small-cap companiess.

Bursa chief executive (CEO) Datuk Fad’l Mohamed mentioned late last week that improving shareholder value remains the main long-term commitment, even as incentives are being evaluated for participating companies.

Well-performing corporate figures outside of the perceived 88 companies are hoping this would bring better valuations for Malaysia’s equity markets as a whole.

Pekat Group Bhd CEO and executive director Tai Yee Chee lauds the MY Value Up programme as a welcome step for the Malaysian capital market, saying: “While it is directed primarily at larger listed companies, it raises the bar across the board – and we think that is right.”

For a company like Pekat, which is preparing for a transfer to the Main Market, the initiative means being committed to holding itself to higher standards in three areas that the programme highlights – clearer investor communication; more disciplined capital allocation; and better forward-looking disclosure.

“That is the direction we are moving in regardless of MY Value Up, but the programme reinforces the discipline,” Tai tells StarBiz 7.

In addition, there is the optimism that the programme will result in real spillover benefits for the engineering and technology services provider, especially in the solar photovoltaic (solar PV), lightning protection and power distribution spheres.

Looking from the business angle instead of an investor perspective, Tai points out that as larger corporations sharpen their strategies and strengthen their balance sheets under MY Value Up, many are also accelerating their sustainability and energy transition commitments.

That flows down to companies like Pekat that are positioned to support the corporations, whether through solar, energy infrastructure, or storage.

“We are seeing this on the ground already, as our residential solar arm, Solaroo Systems, has installed more than 7,500 homes to date, and the corporate solar pipeline is growing as more listed customers formalise their transition plans.

“So while the direct impact of MY Value Up may still be concentrated at the top tier, the indirect benefits are already flowing through,” he observes.

While Tai believes that the MY Value Up will help lift overall market confidence, he reckons that mid- and small-cap companies will still need more targeted support – greater analyst coverage, improved market-making and better investor education.

“The rising tide helps, but smaller boats need a bit more wind in their sails too.

“Ultimately, though, the best thing we can do is keep executing and let our results speak for themselves – that is where investor confidence in a company like Pekat is really earned,” he says.

Solarvest Holdings Bhd group CEO and executive director Datuk Davis Chong, meanwhile, believes that although the MY Value Up currently focuses on large-cap listed corporates, the programme will progressively raise expectations for mid-cap companies including Solarvest.

“The benchmark will move beyond reporting past financial and business performance to presenting a credible value-creation roadmap, particularly in showcasing how management intends to deploy capital, generate returns and create value over the next three to five years.

“For Solarvest, it is an opportunity to reinforce our positioning as a regional clean energy platform through a transparent medium-term strategy, disciplined capital allocation and measurable value creation targets,” he tells StarBiz 7.

Essentially, Chong says it is important for Solarvest to uphold reporting discipline

by giving investors clear visibility into the company’s evolution from an engineering, procurement, construction, and commissioning (EPCC) player into an integrated clean energy platform, where capital is being deployed, the returns expected and how progress will be measured.

“This will become a credible strategy guidebook to facilitate discipline execution, greater impact and valuation,” he says.

Chong, however, feels the benefits will not automatically flow to mid-cap companies, although MY Value Up can strengthen perceptions of the Malaysian equity market.

He says that while foreign investors may become more positive about Malaysia, it does not mean they will discover attractive companies in the RM1bil to RM5bil market-cap range.

“This is because many mid-cap companies still face structural challenges such as lower liquidity, limited analyst coverage and less access to institutional investors. Therefore, quality mid caps will still need targeted support to improve visibility and liquidity,” Chong points out.

A portfolio director with a local fund management firm agrees that the MY Value Up programme alone will not magically re-rate the entire market.

She suggests that mid- and small-cap companies that proactively raise their own game on communication and capital discipline will stand to benefit from any improvement in overall sentiment and domestic risk appetite.

“Companies outside the top tier will still need strong operational execution, and policymakers may eventually need complementary measures, such as targeted incentives, greater engagement with mid-caps from government-linked investment companies, or enhanced sponsor support on the ACE Market, to ensure the rising tide actually lifts the smaller boats too,” she tells StarBiz 7.

In short, the portfolio director says positive directional influence is likely, but the magnitude of the spillover for mid and small caps will be determined by how seriously the large caps deliver results and how quickly higher standards diffuse through the ecosystem.