Title: MESDAQ and ACE markets through the lens of performance: has the 2009 transformation paid off?

Authors: Rafik Harkati; Fekri Ali Shawtari; Abdelkader Laallam

Addresses: IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia, 53100, Selangor, Malaysia ' Business and Computer Department, Qatar Community College, Doha, Qatar ' Department of Finance, King Faisal University, Al-Hasa, Saudi Arabia

Abstract: On 29th July 2009, Bursa Malaysia developed a new board structure, the main and second boards were merged as one unified board called the main market, whereas MESDAQ market had a name change as ACE market, whereby firms other than technology-based are permitted to list on ACE market. This study seeks to investigate the effectiveness of this restructuring in enhancing the performance of the ACE market firms and alleviating liquidity constraints. The study employs unconsolidated data of 126 companies operating in ACE market for the period 2004-2018, generalised method of moments (GMM) and ratios' analysis techniques are employed in the investigation. The findings revealed that, it is size, equity, and sales growth that mainly drive performance in the ACE market. Leverage is to be determined with caution based on the core business of the firm and the sort of investment. While financial constraints have been alleviated, further actions are recommended to enhance this market as performance post-2009 transformation is not up to expectations. Setting the optimal capital structure and choosing between long-term and short-term financing should be the primary concerns of the company.

Keywords: access, certainty, efficiency ACE market; Malaysian exchange of securities dealing and automated quotation; MESDAQ market; performance; 2009 transformation.

DOI: 10.1504/IJMFA.2023.131764

International Journal of Managerial and Financial Accounting, 2023 Vol.15 No.3, pp.282 - 315

Accepted: 21 Sep 2022
Published online: 30 Jun 2023 *

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