THE value of po­ten­tial merg­ers and ac­qui­si­tions is fore­cast to hit US$1.5 bil­lion this year fol­low­ing a strong 2017. A healthy pipe­line of ini­tial pub­lic of­fer­ings is also on the cards, say ex­perts.

New Straits Times - - BUSINESS - AMIR HISYAM RASID bt@me­di­

THE value of po­ten­tial merg­ers and ac­qui­si­tions (M&As) in­volv­ing lo­cally-listed com­pa­nies is fore­cast to reach US$1.5 bil­lion (RM5.98 bil­lion) this year fol­low­ing a strong 2017.

Pro­ceeds to be raised from ini­tial pub­lic of­fer­ings (IPOs) are also ex­pected to be healthy this year.

With these pos­i­tive fore­casts, an­a­lysts said the fi­nan­cial mar­ket will con­tinue to be driven by the coun­try’s buoy­ant eco­nomic fun­da­men­tals de­spite the change in gov­ern­ment.

One an­a­lyst ex­pects the gov­ern­ment to also spur M&As among listed com­pa­nies, es­pe­cially gov­ern­mentlinked com­pa­nies (GLCs).

Ac­cord­ing to Bloomberg data, the M&As in­volv­ing listed com­pa­nies will reach US$1.5 bil­lion this year based on com­pleted, pend­ing and pro­posed deals.

M&As will spur the cap­i­tal mar­ket, other than adding value to the listed com­pa­nies, ei­ther through the cre­ation of syn­er­gis­tic busi­nesses or new sources of rev­enue stream.

Last year was a ro­bust year for M&As, with 384 deals — the high­est since the fi­nan­cial cri­sis in 2008 and 2009.

IPOs, on the other hand, have been one of the main driv­ers in at­tract­ing in­vestors to the stock mar­ket. A healthy level of IPOs in­di­cates a vi­brant stock mar­ket.

Last year, Bursa Malaysia reg­is­tered one of its strong­est per­for­mances, at­tract­ing 13 new list­ings that raised RM7.4 bil­lion.

Bursa Malaysia chief ex­ec­u­tive of­fi­cer Datuk Seri Ta­jud­din Atan said ear­lier this year the IPO pipe­line was do­ing quite well, with “some big ones com­ing”.

Up­com­ing list­ings will boost pro­ceeds to be raised from IPOs this year, in­clud­ing those of QSR Brands (M) Hold­ings Bhd, Rev­enue Group Bhd and Mi Equip­ment Hold­ings Bhd.

Mar­ket an­a­lyst Nazarry Rosli ex­pects the stock mar­ket to con­tinue to be ac­tive this year, in line with the strong fi­nan­cial mar­ket, es­pe­cially with M&As and IPOs.

He said the change in gov­ern­ment will prob­a­bly re­sult in changes in a few in­dus­tries, such as con­struc­tion, me­dia and GLCs, thus lead­ing to higher prob­a­bil­ity of M&As.

He also ex­pects ma­jor changes in the share­hold­ing of com­pa­nies with links to the pre­vi­ous gov­ern­ment as well as new man­age­ment ap­point­ments in GLCs.

Mean­while, MIDF Re­search head Redza Rah­man ex­pects the econ­omy to be strong, driv­ing a solid cap­i­tal mar­ket.

“Be­sides en­sur­ing the rule of law, an­other key in­gre­di­ent to the strong econ­omy is the sus­tain­able cap­i­tal mar­ket to fi­nance the growth of Malaysian cor­po­rates. A re­spon­si­ble gov­ern­ment of the day would want to see the coun­try fur­ther de­vel­op­ing to reach greater po­ten­tial,” he told NST Busi­ness.

Nazarry Rosli

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