Most newly-listed firms doing well

by **Cals** Sun 19 Jul 2015, 18:12

Most newly-listed firms doing well

Friday, 17 July 2015
By: LEONG HUNG YEE

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During a briefing on Wednesday, Bursa Malaysia CEO Datuk Tajuddin Atan said that under the current market uncertainties, the number of companies going for listing this year was expected to be lower at 12-13, compared with 15 IPOs last year.

PETALING JAYA: Despite the volatile stock market, four out of the five local newly-listed companies are trading above their initial public offering (IPO) prices, setting the right tone for other listings to come to the market this year.
The one debutant that is trading slightly below its offer price is Malakoff Corp Bhd, the
largest listing of the year, which raised a whopping RM2.74bil. Its shares were sold at an IPO price of RM1.80 and saw an over-subscription. It closed yesterday at RM1.77.
But taking the last 13 listings on Bursa Malaysia, the picture is more mixed – only eight out of 13 are trading “above water”.
Analysts are of the opinion that while the general performance of these listings has been unexciting, some stood out with impressive runs.
“It would be unfair to say that the under-performing counters would affect other IPOs. It’s rather confined to several counters,’’ an analyst said.
“There’s also a diversity of companies being listed, which gives investors a better choice to diversify their portfolios,” he added.
Fortress Capital chief executive officer Thomas Yong said investors had grown wary with the recent volatility in regional bourses and, as such, issuers ought to price their offerings accordingly.
“The pricing of IPOs need to be a little more conservative to ensure a healthy take-up and hopefully healthy secondary pricing post listing,” he said.
Another fund manager concurred, saying that issuers who priced their offerings well, “leaving something on the table for investors”, would be remembered by the market for their next exercises. “The converse is also true,” he said.
Year-to-date, Bursa Malaysia has received five new companies. The five are Bioalpha Holdings Bhd, Malakoff Corp Bhd, Dolphin International Bhd, Sedania Innovator Bhd and Xin Hwa Holdings Bhd.
Two more companies, namely Sunway Construction Group Bhd and Ikhmas Jaya Group Bhd, are scheduled to list within the next two weeks.
During a briefing on Wednesday, Bursa Malaysia CEO Datuk Tajuddin Atan said that under the current market uncertainties, the number of companies going for listing this year was expected to be lower at 12-13, compared with 15 IPOs last year.
“Companies come to the market to raise capital during an economic environment that is conducive for their business,” Tajuddin said, noting that Bursa was cognisant of the lower number of IPOs this year amid an uncertain global economic climate.
Meanwhile, two promising firms have decided to shelve plans indefinitely.
Sime Darby Bhd is delaying the listing of its auto unit, Sime Darby Motors Bhd, due to unconducive market environment.
The other is Weststar Aviation Services Sdn Bhd, the largest provider of chartered helicopters to oil and gas companies in South-East Asia. It is believed to be having second thoughts about listing. Besides the lacklustre market, Weststar was also concerned about low crude oil prices, industry sources said.
Some of the top-performing new listings are E.A. Technique (M) Bhd, Only World Group Holdings Bhd and Sasbadi Holdings Bhd.
Johor Corp subsidiary E.A. Technique, which was listed on Dec 11, 2014, has gained more than 73% over its IPO price of 65 sen. The marine vessel operator closed at RM1.13 yesterday. Year-to-date, it had risen over 140%.
Theme park and food and beverage operator Only World has gained more than 190% over its IPO price of 88 sen. The company, which was listed on Dec 18, 2014 closed 5 sen higher to RM2.63.