Southeast Asia set to see eight more mega-IPOs by end-2012
2012-06-22 16:15:42
Underwriters are set to roll out eight mega initial public offerings (IPO) in Southeast Asia in the second half of 2012, with each IPO aiming to raise at least US$400 million to as much as US$1 billion.
Despite poor investor sentiment over the Euro zone debt crisis, market watchers say these new listings aim to tap the growing liquidity in Southeast Asia and benefit from the strength of its economies.
Given the economic slowdown in China and other East Asian economies, investors are now turning their eyes to Southeast Asia, many of which are seeing growing domestic consumption and GDP growth ranging from 5 per cent to 6 per cent this year.
"There is plenty of liquidity within the region, within Malaysia itself and also buy in to the stories itself. These are the conditions that we are having at this point," CIMB Research executive director Song Seng Wun said.
Apart from valuations, investors are buying into growth stories such as palm oil and healthcare plays.
Underwriters say the IPO market is still active in Singapore, Malaysia and Indonesia, with at least three US$1 billion IPOs in the pipeline.
Investec Aviation Trust and Reliance Flag Telecom Trust are both reportedly targeting to raise as much as US$1 billion each in Singapore.
This is in contrast to Hong Kong, which saw IPOs like Graff Diamonds pull out because of a lack of interest from international investors.
"If you are looking at South East Asia, I can see that quite a number of companies still going ahead with their IPO plans and that's because I think they rely less on international investors to subscribe," Max Loh, country managing partner at Ernst & Young LLP said.
Next week, Malaysia will see the US$3.1 billion listing of Felda Global Ventures, which is set to be the world's second largest IPO this year .
And news of Malaysian tycoon Ananda Krishnan's plans to re-list Astro All-Asia Networks by end-September to raise US$1 bililon have also captured the world's attention
"(In) the Malaysian environment, the domestic funds ... have limited mandate to invest into overseas equities, therefore they will only invest in domestic listings," Matthew Song, head of equity capital markets, Southeast Asia, HSBC, said.
Underwriters see pension schemes across South-East Asia as potential cornerstone investors, given that their assets under mangement and employee provident funds have grown significantly over the years.