Malaysia is set to vault ahead of Hong Kong as Asia’s largest market for international initial public offerings with the planned flotation of shares in two massive government-linked companies defying a gloomy global listings environment.
The IPOs, by palm oil plantation operator Felda and Integrated Healthcare Holdings one ofAsia’s largest hospital operators, are proceeding thanks to strong backing from cash-rich Malaysian pension funds, according to analysts.
Combined, the IPOs are expected to raise as much as $5.2 billion.
Felda Global Ventures priced the bulk of its planned $3.2 billion initial public offering at 4.55 ringgit ($1.42) a share, near the top of an indicative range. Two people familiar with the deal said the institutional tranche was 45 times subscribed, with a much smaller retail tranche three times subscribed. The retail allocation was priced at 4.46 ringgit.
Felda, which is the second largest palm oil plantation operator after Sime Darby by land under ownership, would be the world’s second largest IPO after Facebook's.
However unlike other recent global IPOs of similar size most of the shares have been allocated to a line-up of “cornerstone” investors and large domestic institutional investors, which advisers say should ensure its success.
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