After four years of decline, initial public offerings in Malaysia are expected to gain momentum this year, on the back of faster economic growth outlook, reported Asia Nikkei.
In fact, two Malaysian companies – property trust KIP Real Estate Investment Trust and oil-and-gas services firm Serba Dinamik Holdings – are expected to list on Bursa Malaysia in February.
Affin Hwang Capital’s head of research Chue Kwok Yan believes that there is a pent-up demand for IPOs considering that some companies have delayed their listings for the past three to three years.
Property developer Eco World International, for instance, has delayed its US$500 million (RM2.2 billion) share sale plan last year, while QSR Brands, which owns Pizza Hut and KFC restaurants in Southeast Asia, is looking to raise some US$400 million (RM1.8 billion).
Data from Dealogic showed that Malaysian companies raised a total amount of around US$250 million (RM1.1 billion) from IPOs in 2016, the lowest raised since 2008, as a slowing economy and lingering political scandal dimmed the appeal of assets within the country.
Nonetheless, the Malaysian economy is expected to grow faster this year at five percent from an estimated 4.5 percent in 2016. The faster growth is expected to lure investors back into the once overheated IPO market.
“There will be more activity in 2017 than in 2016,” said CIMB Investment Bank regional head of equity capital markets Derek Lim. “We expect more companies to come back into the market as investor sentiment improves.”
Meanwhile, Vincent Khoo, head of research at UOB Kay Hian, explained that IPO issuers are “coming in only because they need capital.”
“You need sentiment to improve a lot before foreign investors come back.”
Image sourced from The Capitalist
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my
