Gan Eng Peng
KUCHING: Initial public offerings (IPOs) have been lacklustre so far into the year despite earlier optimism for Malaysia’s IPO market to more than double to US$7.1 billion (RM22.9 billion).
Souces attribute the pale performance to date to foreign funds exiting Malaysia’s equity market since the year started.
“For large capitalisation listings, market players will need to pull in enough foreign interest and institutional investors to float shares,” it said.
“However in the past few months, it is observed that foreign funds continued to be net sellers of Malaysian stocks in the open market.”
The research side of MIDF Amanah Investment Bank Bhd (MIDF Research) in its fund report on February 4 highlighted a total of RM3.68 billion had exited Malaysian equity up to that date.
The latest figures as of April 7 observed that foreign portfolio funds were net purchasers of Malaysian equity for the second week running.
“After pumping in a massive RM832.7 million in the trading week ended March 28, foreign funds bought a more sedate RM107.7 million of Malaysian equity last week,” MIDF Research said, adding that foreign funds have not bought for two consecutive weeks since October 2013.
When asked on his thoughts about company listings on Bursa in 2014, Hwang Investment Management Bhd (HwangIM) head of equities Gan Eng Peng also believed the pipeline for initial public offerings (IPOs) in 2014 is not very strong.
“The quality of IPOs are also not very interesting compared to 2013. We think it could be a challenging year,” Gan told The Borneo Post.
“There will be more listings but the quality and quantity of listings in 2014 is not as attractive as 2013.”
A check on Bursa highlights there has only been two Main market listings and one ACE Market listing so far in 2014, bringing the total number of listed companies to 798 and 109 respectively to date.
The companies are IOI Properties Group Bhd, SCH Group Bhd and MyETF MSCI Malaysia Islamic Dividend.