Malaysia's IPO boom is a one-off: analysts

  • Karpal Singh dies in road accident, son injured
    Karpal Singh dies in road accident, son injured

    Bukit Gelugor MP Karpal Singh died in a car accident on the North-South Expressway this morning near Gua Tempurung, Kampar in Perak. Police has confirmed the incident that happened shortly before 1am at KM301.6 of the expressway. Karpal, who would have turned 74 in June, was believed to be travelling from Kuala Lumpur to Penang to attend a... …

  • Sales of Malaysian products normal in China despite boycott call – Bernama
    Sales of Malaysian products normal in China despite boycott call – Bernama

    The sales of Malaysian products in China, particularly food and beverage (F&B) products, remain normal despite calls by Chinese netizens to boycott them following the disappearance of Malaysia Airlines (MAS) flight MH370. A Malaysian importer of various products here, Loh Wee Keng, said the sales of F&B products were normal, especially in... …

  • Detainee’s ‘sudden death’ in jail due to viral infection, say police – Bernama

    A man who was remanded by the police last week on a drug-related offence was found dead at the Jinjang police station lock-up in Kuala Lumpur early today. The police found A. Mogan, 48, on the floor of the cell and foaming at the mouth at 12.45am. Sentul police chief ACP Zakaria Pagan said after finding Mogan unconscious, the police called... …

  • Sea Dragon and other probes that can go deeper may take over if mini-sub fails, says CNN
    Sea Dragon and other probes that can go deeper may take over if mini-sub fails, says CNN

    The search for Malaysia Airlines flight MH370 is nearing the end of its 40th day without any significant development and CNN aviation consultant Mary Schiavo said underwater probes which can go deeper may be deployed if current efforts using a high-tech mini-submarine fails. The mini-submarine or autonomous underwater vehicle (AUV), known as... …

  • Police cadet delivers baby in toilet while under training
    Police cadet delivers baby in toilet while under training

    A police trainee who was undergoing training at the police training centre (PULAPOL) delivered a baby girl in a toilet at a hospital yesterday, three months after she was tested negative for pregnancy. A source said the trainee, delivered her baby in a toilet of the Kuala Lumpur Hospital at 11am. Both mother and child are in good health. It... …

  • Mahathir wants Causeway replaced with ‘Friendship Bridge’ to Singapore – Bernama
    Mahathir wants Causeway replaced with ‘Friendship Bridge’ to Singapore – Bernama

    Former Prime Minister Tun Dr Mahathir Mohamad (pic) today suggested the removal of the Johor Causeway in order to build the Friendship Bridge proposed by the government.    He said the Johor Causeway causes various problems, mainly involving environmental issues and traffic congestion, in Johor Baru.   "If it is a bridge, then what need is... …

Malaysia is tipped to be Asia's top IPO market for 2012 thanks to two of the world's biggest company listings this year, but analysts say the momentum is likely to fizzle out.

At a time of global economic distress, Malaysia's drive for initial public offerings is being propped up by pre-election encouragement from the government and by cash-rich state funds, the analysts said.

But they said the resource-rich, developing Southeast Asian country of 28 million people is not on course to supplant better known IPO capitals in the region such as Hong Kong and Singapore.

"Maybe this year is a record, but whether it can be sustained is a different thing," James Ratnam, a research analyst with TA Securities, told AFP.

Felda Global Ventures, an oil palm plantation giant, made its debut on the Kuala Lumpur stock exchange, known as Bursa Malaysia, last Thursday with an IPO that raised $3.25 billion.

Then on Tuesday, Asia's largest hospital operator IHH Healthcare announced a plan to raise $2.01 billion through a dual listing in Malaysia and Singapore, targeted for July 25.

The public offerings were behind only Facebook's troubled IPO of $16 billion this year, which suffered in part from the economic uncertainty gripping bigger stock markets around the world.

While English football club Manchester United is now going ahead with a US listing, the volatile climate has forced the delay of other major IPOs planned in Asia, including a $2.5 billion listing by Formula One in Singapore.

But Felda Global and IHH seem set to defy that trend, helped by representing robust and growing industries in commodities and healthcare respectively.

Shares in the palm oil company has already surged since its IPO and analysts expect IHH stock will do well too.

"We are putting Malaysia on the global map. We are actually now considered a safe haven," Ooi Chin Hock, a dealer with Malaysia's M & A Securities, told AFP.

IHH has already attracted 22 so-called cornerstone investors, including international fund managers, who have committed to buying more than 60 percent of the 2.23 billion shares on offer.

Ooi and others attribute their optimism in part to the support of cash-strong state funds keen to invest, as well as the government's backing of the IPOs ahead of elections that must be called by next April at the latest.

"It's time for the government to raise funds... The government is actually cashing in," Ooi said.

Felda Global is an arm of the Federal Land Development Authority, a government agency that previously provided land to the rural poor.

IHH is majority-owned by sovereign wealth fund Khazanah, which is chaired by Prime Minister Najib Razak.

Najib said the IPOs marked milestones in the government's plan to divest state-linked firms and attract foreign investors for the country to achieve developed nation status by 2020.

"I can safely say that this also offers further evidence of the vibrancy and growing depth of our capital markets -- once again underlining the fact that Malaysia can claim to be a bright spot on the otherwise dark canvas of global finance," Najib said at the IHH prospectus launch Tuesday.

Nazir Razak, chief executive of financial firm CIMB Group and Najib's brother, said Malaysia looked set to be Asia's top IPO market for this year. CIMB is the principal adviser and lead underwriter for the IHH listing.

Global accountancy firm Ernst and Young has said Bursa Malaysia was the third-biggest in terms of funds raised in IPOs in the second quarter of 2012, following NASDAQ and the New York Stock Exchange.

It said in a release last week that the momentum of IPOs in Southeast Asia was driven by "resilient financial performance, the support of cornerstone investors, pension and other funds, and ample liquidity".

But analysts said the Bursa Malaysia was unlikely to be able to sustain the momentum, noting that it had failed thus far to attract major listings from global players and remained far smaller than regional rivals.

Before this year, the last major listing in Malaysia was in 2010 when Petronas Chemicals Group Bhd., a unit of state oil firm Petronas, raised $4.14 billion.

Bernard Ching, head of Alliance Research, said big names wanting to list in Asia were still more likely to turn to Hong Kong or Singapore.

"In a volatile global market, Malaysia tends to do rather well," he told AFP. "(But) when the global uncertainties dissipate, IPOs in other markets will also pick up."

Follow @YahooMalaysia on LINE for daily news updates.

Comments on Yahoo pages are subject to our link to Comments Guidelines. You are responsible for any content that you post. Yahoo is not responsible or liable in any way for comments posted by its users. Yahoo does not in any way endorse or support comments made by its users.

  • ‘Huge’ Hindu, Buddhist statues against Islam, ex-judge says The Malay Mail Online
    ‘Huge’ Hindu, Buddhist statues against Islam, ex-judge says

    KUALA LUMPUR, April 16 — The “huge” statues at a Hindu temple in Batu Caves and Buddhist temple in Penang are an affront to Islam as the religion forbids idolatry, a retired Court of Appeals judge... …

  • Wreck hunter confident MH370 crash site found, says Aussie paper The Malaysian Insider
    Wreck hunter confident MH370 crash site found, says Aussie paper

    A wreck hunter is confident that the search teams had pinpointed the crash site of Malaysia Airlines flight MH370 and believes that the black boxes will be located soon, the Sydney Morning Herald (SMH) reports. David Mearns, director of Blue Water Recoveries told the ABC's 7.30 programme yesterday, he was confident that, because of their... …

  • ‘All the best’, Selangor MB tells Bible society at exit The Malay Mail Online
    ‘All the best’, Selangor MB tells Bible society at exit

    SHAH ALAM, April 15 — Selangor Mentri Besar Tan Sri Khalid Ibrahim said today he wished the Bible Society of Malaysia (BSM) well on its decision to move its headquarters out to Kuala Lumpur to... …