KUALA LUMPUR/SINGAPORE: Westports Holdings Bhd, the operator of Malaysia’s busiest port, has priced its initial public offering (IPO) at the top of its projected range to raise US$680 million (RM2.2 billion), signalling a boost for Southeast Asia’s capital markets on pent-up demand for emerging market stocks.
Sources said foreign and domestic funds jostled to bid for Westports, which is partially owned by Asia’s richest man Li Ka-Shing, taking advantage of the US Federal Reserve’s (Fed) unexpected decision not to withdraw stimulus.
The result bodes well for an up to US$730 million IPO by UMW Oil & Gas Corp in October, which is set to be Malaysia’s biggest listing of the year and could give other firms in Malaysia and Southeast Asia the confidence to push ahead with listing plans.
“Issuers in Southeast Asia are taking advantage of this new window as a result of the Fed’s surprise decision to not taper — free liquidity reigns and this has been a shot of adrenaline in the arm for emerging market risk appetite,”said James Fleming, co-head of Asia Pacific global capital markets at Bank of America
Merrill Lynch in Hong Kong.
IPOs in Southeast Asia had been hit by the global market turmoil sparked by Fed chief Ben Bernanke’s comments in May that the US central bank planned to unwind its massive stimulus.
Malaysian listings were also hurt by political uncertainty before the general election in May.
Westports’ book was more than 30 times oversubscribed and closed two days earlier than scheduled. Overseas demand was instrumental
in pushing pricing to the top of the RM2.30-RM2.50 indicative range for institutional investors, the sources said.
Westports, which manages the world’s 12th most active port overlooking the Straits of Malacca, declined immediate comment.
IPOs that could get a bump include a US$220 million deal by Seven Eleven Convenience Bhd, which could come in the coming months, and a US$300 million floatation by property development
firm Iskandar Waterfront early next year.
And 2014 could be a repeat of 2012, when Malaysia was Asia’s top destination for listings, with state investor 1Malaysia Development Bhd planning a US$3 billion listing for its energy
assets and independent power producer Malakoff Corp and looking at an up to US$1 billion IPO.
At RM2.50 per share, Westports will have a market value of some RM8.53 billion when it debuts on October 18. All proceeds from the offering will go to existing shareholders and not to the company, which has said it is listing to raise awareness of its brand.
Westports leaned heavily on cornerstone investors, ranging from Utilico Emerging Markets to Genesis Investment Management,
which accounted for nearly half of the institutional tranche. Reuters