Bursa IPO pipeline to remain healthy
Bursa Malaysia Bhd is likely to keep up its recent trend of drawing over 20 initial public offerings (IPOs) a year, although the market is expected to turn soft in 2012, said its chief.
This year is set to end with 28 new listings, just one short of last year’s 29. Together, they raised funds of close to RM7 billion.
The largest was that of tycoon T. Ananda Krishnan’s Bumi Armada Bhd in July, which raised RM2.7 billion.
Bursa chief executive officer (CEO) Datuk Tajuddin Atan said it was difficult to say if the exchange would be able to top this year’s number, even though the local market has been relatively resilient, in the face of stormy markets globally with the European debt crisis deepening.
“Hopefully (we can), but next year is challenging
... very, very challenging. You know for a fact that markets are soft. But I think, what we’ve seen here is that our market is resilient.
So, consistently above 20 is still good. Above 20 is a good number for an exchange of our size,” he told Business Times.
At the time of the interview, Bursa was in the midst of crunching out its listing target number for 2012.
Still, Tajuddin claimed he is not overly concerned about numbers, per se, and insists there continues to be “strong pipeline” of companies that could list when the time is right.
“I’m more interested in a consistent pipeline and in the quality of companies that come in,” he remarked.
Investment bankers said Tajuddin has advised some of them to be more mindful of the quality of companies they bring to the market.
The biggest IPO slated for next year is plantation group Felda Global Ventures', which is expected to happen in April and and will reportedly raise around RM6 billion, making it the largest since the record RM12.8 billion IPO of Petronas Chemicals Group Bhd last year.
Other sizeable ones to come include Khazanah Nasional Bhd's healthcare unit Integrated Healthcare Holdings, which may happen in the first half, and Gas Malaysia, which sources said could be in February or March.
Gas Malaysia, a unit of MMC Corp Bhd, was initially to have listed late this year but delayed the move as it is still trying to comply with some conditions imposed by the Securities Commission.
Stock exchange data shows that as at December 14, 15 of the 28 companies listed this year were trading below their IPO prices.
Tengku Datuk Zafrul Tengku Abdul Aziz, CEO of Maybank Investment Bank, which ranks second on the Bloomberg league table of top underwriters for IPOs here, said blue-chip companies were more likely than small firms to brave a listing next year amid the more cautious market sentiment.
While there is still ample liquidity to support IPOs, investors have become risk-averse and are more selective in what they go for, he noted.
"It's going to be tough for smaller companies.
"People are looking not only for a growth story but also yield play," he said, adding, however, that small Ace Market-type companies with "solid" fundamentals and earnings could still attract investors.
Azlin Arshad, ECM Libra Investment Bank deputy CEO, said there would be "pockets" of opportunity for companies, including small ones, to list next year.
"You're going to get pockets, windows, where suddenly liquidity is back and investors have an appetite for new issuances. It won't be throughout the year," she said.
The largest was that of tycoon T. Ananda Krishnan’s Bumi Armada Bhd in July, which raised RM2.7 billion.
Bursa chief executive officer (CEO) Datuk Tajuddin Atan said it was difficult to say if the exchange would be able to top this year’s number, even though the local market has been relatively resilient, in the face of stormy markets globally with the European debt crisis deepening.
“Hopefully (we can), but next year is challenging
... very, very challenging. You know for a fact that markets are soft. But I think, what we’ve seen here is that our market is resilient.
So, consistently above 20 is still good. Above 20 is a good number for an exchange of our size,” he told Business Times.
At the time of the interview, Bursa was in the midst of crunching out its listing target number for 2012.
Still, Tajuddin claimed he is not overly concerned about numbers, per se, and insists there continues to be “strong pipeline” of companies that could list when the time is right.
“I’m more interested in a consistent pipeline and in the quality of companies that come in,” he remarked.
Investment bankers said Tajuddin has advised some of them to be more mindful of the quality of companies they bring to the market.
The biggest IPO slated for next year is plantation group Felda Global Ventures', which is expected to happen in April and and will reportedly raise around RM6 billion, making it the largest since the record RM12.8 billion IPO of Petronas Chemicals Group Bhd last year.
Other sizeable ones to come include Khazanah Nasional Bhd's healthcare unit Integrated Healthcare Holdings, which may happen in the first half, and Gas Malaysia, which sources said could be in February or March.
Gas Malaysia, a unit of MMC Corp Bhd, was initially to have listed late this year but delayed the move as it is still trying to comply with some conditions imposed by the Securities Commission.
Stock exchange data shows that as at December 14, 15 of the 28 companies listed this year were trading below their IPO prices.
Tengku Datuk Zafrul Tengku Abdul Aziz, CEO of Maybank Investment Bank, which ranks second on the Bloomberg league table of top underwriters for IPOs here, said blue-chip companies were more likely than small firms to brave a listing next year amid the more cautious market sentiment.
While there is still ample liquidity to support IPOs, investors have become risk-averse and are more selective in what they go for, he noted.
"It's going to be tough for smaller companies.
"People are looking not only for a growth story but also yield play," he said, adding, however, that small Ace Market-type companies with "solid" fundamentals and earnings could still attract investors.
Azlin Arshad, ECM Libra Investment Bank deputy CEO, said there would be "pockets" of opportunity for companies, including small ones, to list next year.
"You're going to get pockets, windows, where suddenly liquidity is back and investors have an appetite for new issuances. It won't be throughout the year," she said.
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