Tuesday, October 4, 2022
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Grab’s Listing On Nasdaq A Wake Up Call For Government To Review Its Policies

On Thursday (2 December), a former Malaysian start-up, Grab Holdings Ltd, has make its debut on the United States’ Nasdaq stock exchange via a backdoor listing.

The Southeast Asia’s leading super-app Grab, started off as MyTeksi with some initial funding from the government’s Cradle Fund but it soon moved its headquarters to our neighbouring country, Singapore to expand its business.

Fast-forward to date, its market capitalisation is almost double the market capitalisation of Malayan Banking Bhd, which is the country’s largest listed company.

This also suggests that there is an immediate need for the government to review its policies that lead to the exit of companies with high potential such as Grab as it is a indirect sign of lack of confidence in the domestic market.

Above all else, Malaysia would lose huge economic opportunities and the chance to strengthen the domestic talent pool, if our homegrown companies seek to leave our country given the lack of willingness to fund such ventures.

According to The Star, a source revealed that a key reason for Grab to change its headquarters to Singapore was lack of funding from Malaysian sources to upscale its business further.

However, Grab is not the only “gem” that Malaysia has lost in the past.

As of 30 June 2019, there were a total of 68 homegrown companies who have been listing in other stock exchanges including Hong Kong and Australia and experts said that Malaysian companies are leaving the shores in search of greater market accessibility, more diversified capital options and a high-quality talent pool.

They also pointed out that Malaysia needs to undertake important structural changes if it is serious about retaining such companies in the country.

In an interview with The Star, Socio-Economic Research Centre executive director Lee Heng Guie said the country has the ecosystem for startups to be built and strengthened, but more needs to be done to fine-tune the ecosystem as the needs for such startups are constantly changing.

However, he said that regulators have to be open minded in evaluating ideas proposed by startups or in deciding about the financing required by the startups.

Other areas that require government’s attention are taxation and access to financing via the open market.

Using our neighbour as a reference, he said Singapore has an attractive corporate tax rate, alongside a vibrant and liquid market for investors. He added our government needs to think on how to create a similar ecosystem here in Malaysia.

On the other hand, Singapore has a historical advantage based on political stability, a business friendly environment and a fair taxation system.

What do you think about this? Share your thoughts!


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