To list or not to list?

THERE are many companies out there that are doing well financially but choose to remain private corporations.

On the other hand there are also those that are not turning in a stellar financial performance but can't wait to float their shares on the stock exchange.

Local food firm Ramly Burger is now a billion-ringgit a year company but has stayed as a privately held business.

Likewise, another food player, Besta Food Services, has opted to keep a low profile by remaining private.

Elsewhere, engineering and electronics giant Bosch GmbH is a multi-million-euro entity but has not made any plans to offer its shares to the public.

When it comes to listing, it ultimately depends on the company's goal and vision.

Essentially, listing is partly about raising funds. A company which is doing well and plans to expand can seek more funding from the capital market, of which listing is an option.

But of course the owners must be prepared to let go some of their shareholdings to the public and other investors.

Sometimes it's all about credibility because a pub listed company will have to adhere to a set of guidelines policed by the regulator.

A company's credibility will be enhanced as it has to furnish its financial performance every three months and be transparent in its business dealings and give back to the people via CSR (corporate social responsibility).

Another possible reason is that it is usually easier for a listed company to do business.

When a Malaysian company is approached by a potential business partner from as far as Africa, it helps when you know the prospective partner is listed on its own local stock market.

A multi-billion-dollar global company will want to see the track record of its business partners and being a public-listed company will facilitate the various business transactions.

The market is of the view that this year is a good time to list as positive global sentiment and an improved eurozone credit market is expected to provide an upside momentum to share prices on Bursa Malaysia.

The local stock market improved significantly recently in the wake of fresh buying interest, boosted by strong overseas performance, where most markets were flirting with the bullish territory.

The benchmark FTSE Bursa Malaysia KLCI is likely to aim for the 1,600 level, exceeding the historical peak of 1,597 points achieved in July 2011.

This article was featured in http://www.btimes.com.my on 12 March 2012