PETALING JAYA: After elevating the biggest preliminary public providing (IPO) proceeds in Asean for the primary three months of this 12 months, Bursa Malaysia is anticipated to see strong fundraising actions within the coming months.
Specialists are anticipating extra firms to be floated on both the Most important Market, ACE Market or the LEAP Market, as firms need to elevate funds for growth.
Nonetheless, the views are blended on whether or not the IPO proceeds of 2022 may surpass that of final 12 months.
In 2021, there have been 29 new listings that raised RM2.3bil in proceeds, in line with the Securities Fee (SC).
The overall market capitalization of the 29 listings was RM7.01bil.
SC chairman Datuk Syed Zaid Albar had stated on March 28 that 35 IPOs are anticipated on the inventory change this 12 months.
The constructive expectation is underpinned by normalizing financial situations.
Talking with StarBiz, fund supervisor Danny Wong expects the IPO market to show extra energetic within the second half of 2022 as investor sentiment improves.
“The market is on the lookout for new IPOs, because the efficiency of the present listed shares should not that thrilling.
“With rising rates of interest, traders are on the lookout for extra choices to put money into.
“However, in the end, the IPO market efficiency might be pushed by total market sentiment. If the brand new listings have good fundamentals, they need to be capable to carry out,” stated Wong, who’s the chief govt ofifer of Areca Capital.
Rakuten Commerce head of analysis Kenny Yee additionally stated there’s a enormous urge for food for IPOs.
“There may be quite a lot of money circulating within the system on the lookout for new inventory concepts.
“Firms are additionally trying to elevate funds as they get better post-pandemic,” he stated.
In response to Ernst & Younger (EY), Bursa Malaysia is the most effective performing inventory market in Asean when it comes to IPO proceeds raised within the first quarter (1Q) of 2022.
“In Asean, Malaysia’s exchanges led by proceeds at US$362mil (RM1.5bil) by way of 5 IPOs,” it stated in a press release yesterday.
Out of the 5 IPOs, two had been giant cap firms listed on the Most important Market, specifically Senheng New Retail Bhd and Khazanah Nasional-backed Farm Contemporary Bhd.
Senheng was listed with an IPO market capitalization of near RM1.61bil, whereas Farm Contemporary was valued at near RM2.51bil on the time of itemizing.
Along with the 5 IPOs, Pappajack Bhd was listed on the ACE Market early this month.
Cengild Medical Bhd and MN Holdings Bhd are anticipated to be listed on the ACE Market additionally this month.
EY additionally famous that Indonesia’s inventory market was essentially the most energetic by IPO deal numbers within the first quarter.
Indonesia noticed 12 IPOs that raised US$219mil (RM926.5mil) within the interval.
Throughout different Asean markets, Thailand’s exchanges noticed 5 IPOs elevating US$228mil (RM965mil), the Philippines Inventory Trade had 4 IPOs elevating US$201mil (RM850.3mil) whereas Singapore’s Catalist welcomed three IPOs, elevating US$17mil (RM72mil).
“Asean’s exchanges noticed a 32% improve in deal numbers (29 IPOs in 1Q22, up from 22 IPOs in 1Q21), however a 57% decline in proceeds (US$1bil or RM4.2bil in 1Q22, down from US$2.4bil or RM10) .2bil in 1Q21).
“The notable decline in proceeds was as a result of lack of a mega IPO being posted in 1Q22, in contrast with one mega IPO a 12 months in the past,” it stated.
On the worldwide entrance, the IPO market efficiency in 1Q22 was much less beneficial.
The worldwide IPO market noticed 321 offers elevating US$54.4bil (RM230.1bil) in proceeds – a lower of 37% and 51% year-on-year, respectively.
“The sudden reversal may be attributed to a variety of points, each rising and residual.
“These embrace the rise in geopolitical tensions, inventory market volatility, worth correction in over-valued shares from current IPOs, rising considerations a couple of rise within the commodity and vitality costs, the impression of inflation and potential rate of interest hikes in addition to the Covid -19 pandemic threat persevering with to carry again a full world financial restoration,” in line with EY.
Areca Capital’s Wong stated regardless of having extra IPOs in Malaysia this 12 months, the funds raised could fall beneath final 12 months’s whole proceeds.
“Funds are on the lookout for shares with uniqueness, so such IPOs could carry out higher than others,” he identified.
It’s noteworthy that among the new shares listed since 2021, are presently buying and selling beneath their concern costs.
Rakuten Commerce’s Yee defined that aside from good fundamentals and sentiment, shares want “affordable valuations” to carry out properly.
“IPOs that had been priced moderately have carried out properly.
“Final 12 months, some IPOs weren’t moderately priced and they’re having a tricky time when it comes to share worth motion,” Yee stated. Shifting ahead, he identified that retail participation in native shares needs to be boosted, and a extra aggressive IPO market may appeal to the retail traders.