Initial Public Offerings (IPOs) in the Malaysian market continue to attract retail investors looking for strong listing-day gains. However, one of the biggest challenges retail investors face is the ultra-low success rate due to heavy oversubscription. If you only apply with your cash savings, your allocated shares might be minimal.
This is where IPO Financing (also known as share financing or leverage) comes into play. By borrowing funds from your broker, you can significantly boost your application size, moving yourself into higher balloting brackets and increasing your chances of securing a meaningful chunk of shares. Today, we’ll compare two of the most popular platforms for IPO financing in Malaysia: the veteran Mplus (Malacca Securities) and the tech-driven newcomer Moomoo (Futu Malaysia).
Understanding the Basics: Interest Rates & Leverage
When you opt for IPO financing, the two most critical levers determining your cost and risk are the funding interest rate and the leverage ratio. A lower interest rate minimizes your financing costs while a higher leverage ratio allows you to commit less upfront cash.
Mplus: Charges a standard interest rate of 8.0% per annum. They generally offer up to 4x leverage (meaning you provide 25% cash, and they finance the remaining 75%).
Moomoo: Disrupts the space with a highly competitive interest rate of 6.8% per annum. Furthermore, they frequently support leverage up to 10x for selected high-demand IPOs (requiring only 10% cash margin).
Note on Interest Calculation: IPO financing interest is calculated daily, but only for the exact period the funds are utilized. This typically spans from the IPO closing date until the balloting announcement date (usually 3 to 5 days).
Head-to-Head Comparison
| Feature / Metric | Mplus (Malacca Securities) | Moomoo Malaysia |
| Base Interest Rate (p.a.) | 8.0% | 6.8% |
| Typical Leverage Cap | Up to 10x (10% margin required) | Up to 10x (10% margin required) |
| Application Platform | Mplus Classic App | Moomoo Mobile App (Fully Digital) |
| Handling/Admin Fees | 8% SST | Fixed RM10 to RM30 structural fee |
| Refund Processing | Automated inside the app wallet | Automated inside the app wallet |
Real-World Case Study: Pentech IPO @ RM0.20
To see how this works in practice, let's look at a scenario involving the Pentech IPO, priced at RM0.20 per share.
Assume you want to aggressively apply for 500,000 shares to secure a better balloting tier. The total application value is:
Total Value = 500,000 shares × RM0.20 = RM100,000
Let's look at how utilizing financing with both brokers impacts your required capital and interest costs assuming a 4-day funding lock-up period.
Scenario A: Mplus (8.0% Interest, 4x Leverage)
With 4x leverage, you need to provide 25% of the total amount as cash. The remaining 75% is financed.
Your Cash Capital: RM25,000
Financed Amount: RM75,000
Interest Cost Calculation: RM75,000 × 8.0% × (4 / 365) = RM65.75
Scenario B: Moomoo (6.8% Interest, 10x Leverage)
Taking advantage of Moomoo's aggressive 10x leverage structure, you only need to provide 10% cash upfront.
Your Cash Capital: RM10,000
Financed Amount: RM90,000
Interest Cost Calculation: RM90,000 × 6.8% × (4 / 365) = RM67.18
Key Takeaway from the Example
Notice how even though Moomoo's interest rate is substantially lower (6.8% vs 8.0%), the total interest paid in the Moomoo scenario is slightly higher (RM67.18 vs RM65.75). This happens because you borrowed RM15,000 more with Moomoo, allowing you to participate in a RM100,000 IPO with only RM10,000 of your own cash instead of the RM25,000 required by Mplus!
If you had matched the exact loan amount at RM75,000 on Moomoo, your interest cost would have dropped to just RM55.89.
Which One Should You Choose?
Choose Moomoo if you want to maximize your capital efficiency. Their 6.8% interest rate combined with higher leverage options ensures you can stretch a small amount of cash into a sizable IPO ballot, keeping your opportunity costs minimal.
Choose Mplus if you prefer working with a traditional broker that has deep roots in the Malaysian corporate scene, or if you already maintain a large margin facility with them that simplifies multi-product collaterals.
Personally, I choose Mplus because I have a dealer who can manually request a 10x financing allocation for me. On the other hand, when I checked with Moomoo, their financing quota runs out incredibly fast—you often have to wait and risk missing out on a slot entirely.
To show you a real example from my own experience: for the Pentech IPO, I applied for 3,000,000 shares, which required a financing amount of RM540,000 (as shown in the screenshot below). The final interest cost came out to exactly RM710.14. Huat arr!
Based on Mplus's 8.0% interest rate, a loan of RM540,000 accumulating RM710.14 in interest means the funds were locked up for exactly 6 days:
- You might notice that this interest calculation spans 6 days instead of the typical 4-day lock-up period. This extended holding period happened because the balloting timeline overlapped with the Wesak Day and Agong's Birthday public holidays, which paused banking operations. Without those holidays, the lock-up would have been just 4 days, dropping the interest cost even lower! Still, paying around RM710 to leverage over half a million ringgit is an incredible deal.
Educational Purposes Only: The content provided on this blog is for informational and educational purposes only and does not constitute professional financial, investment, or legal advice. Initial Public Offerings (IPOs) and the use of share financing/leverage involve substantial risk of capital loss. The hypothetical case study featuring the Pentech IPO is used strictly for mathematical demonstration purposes regarding interest calculations and should not be construed as a recommendation to buy, sell, or subscribe to any security. Past performance is not indicative of future results. Always review the official company prospectus and consult a licensed financial advisor registered with the Securities Commission Malaysia (SC) before making any investment decisions..