More listings to revive IPO pipeline in final lap of 2017

With just over a month to go until the end of 2017, news are rife with reports of more listings to be recorded either by this year or the beginning of next year.

At the beginning of this year, Sime Darby had announced that it planned to create three standalone business; plantation, property, and trading and logistics.

From that, it had revealed plans to list its plantation and property businesses.

Earlier this year, independent power producer (IPP), Edra Power Holdings Sdn Bhd, which was formerly owned by 1Malaysia Development Bhd, was reported to have the intention to list on the Main Board of Bursa Malaysia this year.

It aimed to raise one of Malaysia’s biggest IPOs to date, at RM5 billion from its listing exercise.

Analysts viewed that Edra would be a ‘blockbuster’ IPO with cornerstone fund managers such as the Employees Provident Fund, Retirement Fund Inc, Tabung Haji and Khazanah Nasional Bhd being ‘hungry’ now given the pentup demand for new listings.

“It will be a much sought-after flagship listing which would also attract retail investors to be involved as shareholders in the company,” an analyst told Bernama earlier this year.

Wholly owned by China General Nuclear Power Corp (CGN), Edra has linkages with local and international utility companies. It has investments of more than 25 gigawatts in clean and renewable energy projects.

The projects include wind, solar, hydro, gas-fired, efficient coal fired and fuel-cell powered projects in China, South Korea, Singapore, UK, France and Australia.

Meanwhile, for the LEAP Market, following its launch, Bursa Malaysia revealed that three companies are expected to list on the new board by year-end.

To date, no details have been released on the third possible company to be listed on the LEAP Market this year.

“There are some issues that need to be addressed by these companies before going for listing. To be listed it is more than just doing business. You should organise your business and iron out matters such as the company structure or tax matters,” Tajuddin Atan had told reporters earlier this year.

Aside from Cloudaron and Red Ideas which have successfully listed on the LEAP Market, Agrofresh International Group Sdn Bhd, Polymer Link Sdn Bhd, Trustgate Bhd, Accent Wellness Global Sdn Bhd, East West One Group Sdn Bhd, Macfeam Sdn Bhd, Upstream Downstream Process & Services Sdn Bhd, ProEight Sdn Bhd, and Safetyware Sdn Bhd have expressed their interest on listing on the new board.

Looking further ahead, 2018 is expected to be a more vibrant year for Bursa Malaysia with the new LEAP Market.

One of Bursa Malaysia’s partners; Malaysian Technology Development Corporation Sdn Bhd (MTDC), has already identified 11 companies with potential to be listed on Bursa Malaysia’s Leading LEAP Market next year.

Chief executive officer Datuk Norhalim Yunus said the identification process would be conducted together with KAF Investment Bank Bhd which would act as the adviser.

“The 11 companies are recipients of our Business Expansion Fund and we will assess their qualification for listing under this strategic cooperation with KAF Investment,” he told a press conference after an MoU ceremony between MTDC and KAF Investment.

Better year for Bursa Malaysia

Overall, 2017 is expected to be a better year for the local bourse.

While Bursa Malaysia remains cautiously optimistic on its performance this year, Tajuddin Atan said, “Bursa Malaysia will continue to create a vibrant and sustainable capital market ecosystem to provide more opportunities for fund-raising and trading activities for all our stakeholders.”

Analysts are more positive on Malaysia’s equity market given its performance so far this year.

AmInvestment Bank Bhd’s research arm (AmInvestment) explained that it is positive on the equity market in Malaysia, driven by an expected earnings growth of 8.2 per cent in 2018 for the FBM KLCI, underpinned by a projected GDP growth of 5.5 per cent.

“We expect trading activity in the securities market to be supported by Bursa’s launch of the LEAP, the Mid and Small Cap Research Scheme and new IPOs such as Sime Darby Plantation and Sime Darby Property which are expected to be listed by yearend.

“We maintain our DATV assumptions of RM2.25 billion and RM2.20 billion for the securities market in FY17 and FY18 respectively,” it said.