Sime Darby anti-climax

> Relisted motors and industry firm soars but property and plantation entities make weak debut

KUALA LUMPUR: The listing ceremonies culminating the highly anticipated demerger exercise of conglomerate Sime Darby group turned out to be an anti-climax when two out of three of its pure-play entities – Sime Darby Property Bhd and Sime Darby Plantation Bhd’s share prices faltered on their debut on Bursa Malaysia’s Main Market.

The listing ceremonies of the three which took place on Nov 30, was dubbed as the first of its kind in Bursa Malaysia’s history, with three companies holding listing ceremonies and striking three gongs at the same time. Sime Darby Bhd relisted as a motors and industry company.

The ritual which is normally an earnest event had much merrymaking, with three luxury cars parked at the bull and bear structure from Sime Darby and a life-size tractor model from Sime Darby Plantations.

The leaner forms of the heavyweight however failed to excite the markets as much as the grandeur of its listing ceremonies, with Sime Darby Property and Plantation share prices faltering on their debut. Sime Darby’s share price however jumped 27% to close at RM2.35 on Thursday, with 124.7 million shares traded, making it the top most active counter for the day.

Sime Darby Plantations, which is the world’s largest listed palm oil company in terms of planted land size, saw its share price tumble by 10.37% to close at RM5.01 against its issue price of RM5.59 with 38.18 million shares traded despite opening at a one sen premium.

The Property division did not impress from the start, when it opened at RM1.30 against its reference price of RM1.50. The share price slumped further to RM1.20 when markets closed that day. Sime Darby Property has been added to the FTSE Bursa Malaysia Mid 70 Index.

Nonetheless according to Sime Darby Property chairman Tan Sri Abdul Wahid Omar, the group’s focus going forward will be on building on a stronger foundation in terms of earnings, dividend payout and value creation instead of the share price.

The Sime Darby group announced earlier this year that the main objective of the demerger was not to raise funds, but to create three distinct pure-play companies.

Then group president and CEO Tan Sri Mohd Bakke Salleh and current Sime Darby Plantation executive deputy chairman and managing director said the listings will not entail any public offering of shares as it contradicts the deconsolidation exercise.

Sime Darby group was formed when Golden Hope Plantations Bhd, Kumpulan Guthrie Bhd and Kumpulan Sime Darby Bhd merged in 2007.