Malaysia palm oil giant Felda Global Ventures Holdings' IPO has been massively oversubscribed as the second-biggest listing this year after Facebook looks to buck a gloomy outlook for new issues.

The institutional portion of Felda Global's initial public offering, which is expected to raise more than US$10 billion ringgit (US$3 billion), has been oversubscribed by more than 30 times, Dow Jones Newswires reported Tuesday.

The Malaysian government is planning a June 28 floatation of Felda Global -- one of the country's largest listings ever -- as part of a plan to turn it into a global commodities player.

An industry source familiar with the listing plan said institutional pricing opened for subscription at 4.65 ringgit (US$1.46) per share, at the top end of an indicated range of 4.00-4.65 ringgit for the sale of 2.19 billion shares.

Institutional subscription was to close Wednesday but a Felda spokeswoman said it had no immediate plans for an announcement on pricing. Retail pricing closed Tuesday at 4.55 ringgit.

Analysts said they expected strong demand for the shares, a rare bright spot amid negative sentiment elsewhere, especially following the sensational flop of social media leader Facebook's listing last month.

"It will be on buyers' radar. It will be one of the darlings on the Malaysian bourse," Ooi Chin Hock, a brokerage dealer with M & A Securites in the northern Malaysian city of Georgetown told AFP.

"Palm oil is in big demand. The listing will be a success, because it is a government pet project."

CIMB and Maybank, joint global coordinators for the listing, declined comment when contacted.

Felda Global is the world's third-largest oil palm plantations operator, and is an arm of the Federal Land Development Authority (Felda), a government agency that provides land to rural poor.

Prime Minister Najib Razak announced the listing plan in October, part of a larger push to divest state-run firms and increase foreign investment in the country.

Analysts say the scheme will help Malaysia's US$27 billion palm oil sector -- the world's second largest -- compete with top producer Indonesia.

Felda currently sells palm fruit or crude palm oil to third parties, but the aim is to expand into palm oil processing and other downstream businesses to create a more fully self-contained global player.

Palm oil is a key ingredient in soap and a range of food products whose consumption is predicted to soar in coming decades. Besides palm fruit, Felda also produces rubber, cocoa, and other products.

The world hunger for new listings has been in a funk amid global economic woes, and the outlook was further darkened by Facebook's disastrous US$16 billion offering on May 18. Facebook shares have plummeted since their debut.

Analysts say Felda will fare better because of its strong cash flow, valuable plantation assets, and palm oil's prospects.

The strong investor reception looked likely to take some steam out of a bid by Malaysia's opposition and some settlers' groups to thwart the listing, claiming it could harm the interests of Felda's 112,000 smallholders.

A planned May share debut was pushed back after a farmers' group won a court injunction, but it was later overturned and a June date set.

channelnewsasia.com