MSM Malaysia Holdings Bhd., the Southeast Asian nation’s biggest sugar refiner, surged on its Kuala Lumpur stock market debut today, countering a regional trend.
The stock advanced 31 percent to 4.59 ringgit at 9:35 a.m. local time, with 50.1 million shares traded, making it the biggest gainer and most active stock on the Malaysian bourse. The company sold shares to institutional investors at 3.50 ringgit apiece in its initial public offering.
Nine of the 16 companies making debuts in Malaysia this year have advanced from their offer price, while a majority of those in Hong Kong have lost value for investors, data compiled by Bloomberg show. Of the 92 IPOs greater than $100 million in emerging Asia to have priced and begun trading this year, 70 are down, Bloomberg data show.
MSM is “in a sweet spot” as the Southeast Asian nation’s leading sugar producer, Hoe Lee Leng, an analyst at RHB Research Institute Sdn., wrote in a report yesterday. “We project MSM to record a three-year net profit compounded annual growth rate of 13.9 percent, driven by rising domestic selling prices, stable growth in domestic sugar consumption, increased export volumes and improving export margins.”
Kuala Lumpur-based MSM, a unit of government-owned Felda Global Ventures Holdings Sdn., bought its sugar refining business from Malaysian billionaire Robert Kuok’s PPB Group Bhd. (PEP) for 1.22 billion ringgit two years ago. Felda Global is the commercial arm of the Federal Land Development Authority.
This is the first of five Felda units that may be listed, the Business Times reported on April 4, citing unidentified people familiar with the matter.
MSM raised 818 million ringgit from the share sale, based on calculations by Bloomberg News, making it the second-largest IPO since state oil and gas company Petroliam Nasional Bhd. spun off its petrochemicals business in a record 12.8 billion-ringgit offering in November.
Bumi Armada Bhd., an oil and gas services company controlled by billionaire T. Ananda Krishnan, plans to raise as much as 2.77 billion ringgit in a planned share sale, two people with knowledge of the matter said yesterday. The company will introduce its prospectus on June 30, according to an invitation sent to the media.
Among the 17 listed companies that raised more than $100 million each through an IPO in Hong Kong this year, only two are trading above their offer prices, including Prada SpA which made its debut last week, according to data compiled by Bloomberg.