Malaysia expects more stock market debuts this year as it bids to remain Asia’s top initial public offering (IPO) market for this year after hosting two of the world’s biggest listings in the past month alone.
Following IHH Healthcare’s successful debut yesterday, Bursa Malaysia’s chief Tajuddin Atan said the bourse will see “a few more, definitely, but not as large as this.”
“Make no mistake, under the current environment, would you be able to find a premium [elsewhere]?” he asked while declining to reveal specifics of planned listings.
Tajuddin spoke after IHH shares debuted in Kuala Lumpur and Singapore at 10 percent over the stock’s offer price in a flotation that has raised US$2 billion.
The volatile global economy has delayed other major IPOs in Asia, including a planned US$2.5 billion Formula One listing in Singapore, but Malaysia has been a rare bright spot.
KING OF THE HILL
The IHH listing, and a US$3.2 billion IPO by Malaysia plantations operator Felda Global Ventures last month, have catapulted the Kuala Lumpur exchange ahead of other Asian IPO capitals like Hong Kong and Singapore.
Bursa Malaysia is the third-biggest in terms of funds raised in IPOs in the second quarter of this year, following NASDAQ and the New York Stock Exchange, according to global accountancy firm Ernst and Young.
The Malaysian IPOs were the world’s biggest this year after social networking giant Facebook, which raised a massive US$16 billion in May, but saw its shares quickly plummet afterwards.
However, Tajuddin dismissed comments by some analysts that Bursa Malaysia’s bull run and emergence on the IPO scene was engineered by the government, which heavily backs Felda and IHH and must call elections by next year.
Malaysian sovereign wealth fund Khazanah Nasional owns 47.7 percent of hospital operator IHH’s enlarged capital, while nearly 70 percent of Felda is held by the federal and state governments as well as state pension funds.
The government has assisted firms in going public, but “we must not take away credit from the companies themselves that have expanded to become regional champions,” Tajuddin said.
He said the top 30 companies in the exchange derive 40 percent of their revenue offshore and their dividend yield of 3.4 percent last year was one of the highest in the region.