The chemicals arm of Malaysian state energy firm Petronas raised US$4.1 billion on its stock market debut yesterday, in Southeast Asia’s biggest ever initial public offering (IPO).
Petronas Chemicals Group opened at 5.71 ringgit, a 9.8 percent premium on its institutional price. The result was at the top end of forecasts, reflecting strong demand for the region’s IPOs.
“It is an excellent price,” said George Ratilal, executive vice president for finance at Petronas.
PHOTO: AFP
“We are very, very satisfied with that,” he told reporters at the stock exchange.
The sale eclipses the US$3.3 billion launch of Malaysian mobile operator Maxis last year, and follows the successful offering of AIA, the Asian unit of troubled US insurer AIG, which raised US$20.5 billion dollars in Hong Kong this month.
Investors were attracted by a robust earnings outlook for the firm, a unit of Petroliam Nasional (Petronas), Malaysia’s only Fortune 500 company.
Petronas’ petrochemicals business includes 22 companies that produce chemical compounds, fertilizers, and industrial and specialty chemicals.
The sale is part of Malaysian Prime Minister Najib Razak’s ambitious Economic Transformation Program (ETP), a blueprint to revitalize the economy over the next decade and achieve developed-nation status by 2020.
The government is trying to energize the private sector by divesting some stakes in government-linked corporations, as well as adding much-needed depth and liquidity to the Malaysian bourse.
Yeah Kim Leng, group chief economist with RAM Holdings, said that Petronas Chemicals was drawing both long-term investors and the short-term “hot money” that is flowing into Asia’s more vibrant economies.
“Index-linked funds will have active interest in the stock, which will attract both domestic and foreign investors. It is an iconic stock which investors must have in their portfolio,” he said.
Ratilal was coy about speculation that Petronas, which has listed two subsidiaries this year, is preparing for further big sales.
“There is always speculation about this. Petronas is a large group. People look at some of our companies that we have which they think are right for floatation,” he said. “We are basically fundamentally driven. If we have companies which we think are ready, that can go to the market, that can be sustainable as a listing company, then we will look at it. And it has to be a balance of what is right for Petronas and what is right for the company itself.”
Analysts said the chemicals unit offering was well timed, coinciding with the current surge in global capital flows toward fast-growing emerging economies.
The listing involves the sale of a total of 2.48 billion shares, 72 percent of which are new shares and the remaining 28 percent of which are from parent Petroliam Nasional Bhd.
Malaysian pension funds were committed to taking 18 percent of the IPO. Another 37 percent will be offered to ethnic Malay investors, while 33 percent will be for book building and 12 percent for retail investors.
The Petronas Chemicals share price traded between 5.72 and 5.45 ringgit during the session and analysts said more volatility was expected as retail investors cashed in some profits.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would