Saturday June 30, 2012
IPOs may lend support for bulls in second half
By DANIEL KHOO
KUALA LUMPUR: Despite the gloomy economic outlook around the world and failing Western economies, the slate of initial public offerings (IPOs) set to be listed on Bursa Malaysia may lend crucial support for the bulls in the second half of 2012.
MIDF Amanah Asset Management CEO and chief investment officer Scott Lim said the stage was set for the listing of several high-profile heavyweight IPOs which could further enhance foreign investors' perception of the country's capital markets.
“These IPOs will attract a lot of attention from both local and also foreign investors. They (these IPOs) are likely to also lend support and keep the local stock market buoyant relative to other countries in these uncertain times,” Lim told StarBiz yesterday.
“The high number of IPOs notably from big companies is certainly a good development for the country's capital markets. We have also beaten Hong Kong in terms of the amount of IPO issuances in the first half of this year,” he said.
To recap, there are at least five heavyweight IPOs slated to be listed in the second half of this year. These include IHH Healthcare Bhd, the biggest healthcare services provider in Asia; AirAsia X Sdn Bhd; Astro All Asia Networks Plc; Malakoff Bhd and IGB real estate investment trust (REIT).
Another company which is pondering a REIT is KLCC Property Holdings Bhd .
Most of these IPOs were yielding assets operating in matured markets, Lim noted, adding that yielding companies were high in demand today given the backdrop of uncertainties around the world with the European Union debt crisis, impending decision by the United States whether or not to raise it debt ceiling and China's slowing economy that might have bottomed out in the second quarter.
The FTSE Bursa Malaysia KL Composite Index, which had seen a year-to-date gain of 4.77% in the first half of this year, recorded a comparatively sound and resilient performance against its peers around the region.
“We had actually seen a flat market in the second quarter and some selling in April and May. However, the market rebounded in June due to the then upcoming Felda Global Ventures Holdings Bhd's (FGV) IPO which had exceed market expectations so far,” Lim said.
FGV declined 2 sen at its close to RM5.28 yesterday but had recorded an impressive 16% gain from its institutional IPO reference price of RM4.55, exceeding analysts expectations as well.