IHH Healthcare Bhd’s $2 billion listing has attracted a strong cast of cornerstone investors including Blackrock Inc, sources said, as Malaysia bucks a weak trend for Asian stock flotations this year.
The dual listing of the hospital management firm, slated for the Malaysian and Singapore bourses by the end of July, comes as a string of initial public offerings have been delayed or scrapped because of investor worries about Europe’s debt crisis and China’s slowing economy.
The government’s heavy hand in Malaysia’s economy and the support of local investors have boosted the outlook for its market debutants, including the $3.3 billion listing of Felda Global Venture Holdings Bhd, the world’s second-largest this year after Facebook.
“Malaysian IPOs are a different breed altogether,” said Abdul Jalil, chief executive officer at Aberdeen Islamic Asset Management. “The offerings are well supported by the bulk of locally based investors.”
Felda’s planned listing on June 28 will put Kuala Lumpur neck-and-neck with China’s Shenzhen as the main IPO destination in the Asia-Pacific this year.
The Malaysian IPOs this year, including Gas Malaysia Bhd that debuted on Monday with a 10 percent rise, have been predominantly in defensive sectors that are more popular with investors in times of volatility.
IHH is the healthcare arm of Malaysia’s state investor Khazanah Nasional Bhd. Its assets include Turkish hospital group Acibadem AS, Singapore’s Parkway Holdings, India’s Apollo Hospitals Enterprise Ltd and Malaysia-based Pantai Hospitals and International Medical University.
It is offering 2.2 billion shares, out of which 80 percent will be new shares. The sale amounts to some 25 percent of its enlarged capital.
FELDA IN DEMAND
As well as Blackrock, Capital Group and Och-Ziff Capital Management Group have emerged as cornerstone investors, said two sources with direct knowledge of the flotation, which would be the fourth-biggest IPO in Singapore’s history.
The other cornerstone investors are Singapore sovereign wealth fund government of Singapore Investment Corporation, Fullerton Fund, AIA Group and Hwang Investment Management, the sources said.
“The profile of the cornerstone investors will give the IPO some boost in confidence,” said one of the sources, who declined to be identified as the talks were confidential.
“In good or bad times, it (the IPO) will still do well. It (IHH) operates in a defensive sector.”
The cornerstones would take 1.3 billion out of the 2.2 billion shares available, the second source said, adding that Hong Kong’s Keck Seng Investments, Malaysia’s CIMB Principal Fund and Newton Investment were also investors.
IHH officials were not immediately available for comment.
State-controlled Felda Global is expected to price its IPO on Wednesday at the top of an indicative range on buoyant demand from retail and institutional investors that is 20 times larger than the amount of shares offered.
In contrast, at least five large Asian IPOs have been pulled in recent weeks, including the $3 billion Singapore listing of motor sport racing company Formula One.
Malaysia’s Astro All Asia Networks Plc, owned by tycoon Ananda Krishnan, could become the country’s third-biggest IPO this year after IHH and Felda. Krishnan has mandated CIMB to advise him on the listing in a deal expected to raise around $1 billion in the fourth quarter, a source with knowledge of the deal told Reuters on Monday. -By Yantoultra Ngui