ROBUST M&A DEALS
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.
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.