BURSA Malaysia’s allure as a listing destination is steadily returning as big planned initial public offerings (IPOs) and continued strong fund inflows lift market sentiment, said analysts.
After fewer companies went public last year compared with 2015, issuers are making a comeback to Bursa Malaysia.
This is set to drive the domestic IPO market to a new high in five years.
This year, the market is awaiting the listing of Lotte Chemical Titan Holdings Bhd on July 11, which will be the biggest IPO on Bursa Malaysia since Felda Global Ventures Holdings Bhd (FGV) in 2012.
The listing of Lotte Chemical, a unit of South Korean conglomerate Lotte Group, is expected to raise about US$1.4 billion (RM6 billion).
FGV had raised RM14.6 billion, according to Bloomberg.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed is expected to launch the prospectus today.
Meanwhile, Bank Islam Brunei Darussalam Bhd is also planning an IPO later this year that could reportedly raise up to US$500 million.
The recent RM2.58 billion IPO by property developer Eco World International Bhd in early April had been the largest in Malaysia since June 2015.
MIDF Research said Bursa Malaysia was expecting more IPOs this year.
The 11 listings last year only raised a total of RM660 million.
“We believe Bursa will continue to attract more IPOs due to its competitive services and pricing in the region,” said the research house after a meeting with the Bursa management recently.
Its head of research, Mohd Redza Abdul Rahman, told NST Business the listings of Lotte Chemical and Bank Islam Brunei would enhance Bursa’s profile in attracting bigger listings, even as net foreign inflows stretched into 18th consecutive weeks.
“The re-listing of what was formerly Titan Chemicals Corp Bhd before its acquisition by Lotte Group is a catalyst for more foreign companies and owners to list in our market instead of their home markets. Lotte Group is one of the key players in the oil and gas industry.
“The listing of Bank Islam Brunei, on the other hand, would further strengthen Malaysia’s diplomatic relationship with Brunei,” he said.
One of Bank Islam Brunei’s shareholders, Fajr Capital, is partly-owned by Khazanah Nasional Bhd.