Sunday, August 14

More corporate fund-raising exercises expected

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KUALA LUMPUR: The Malaysian corporate scene will be more exciting in 2010 as the excess liquidity in the system is expected to induce more fund-raising exercises and see the emergence of new bigger players.

The strong capital market, liberalisation of foreign policies, the expected rebound in the country’s real gross domestic product together with the positive domino effect from the region’s economy and equity markets would be the main drivers.

In 2009, numerous corporates took the opportunity to raise funds from the capital market via rights issues or placement exercises.

For instance, Malayan Banking Bhd has completed the largest rights issue of RM6.02 billion followed by Axiata Group Bhd, which raised RM5.23 billion.

Khazanah Nasional Bhd also placed out shares inBhd and the IJM Corp Bhd.

“New placement and more fund-raising exercises in theequity market are expected to further shine in 2010,” an analyst from OSK Research, Chris Eng said.

The bond market, however, is expected to be quiet with fewer issuesstarting from the middle of next year as the interest rate is likely to rise.

On the initial public offerings, the proposed listing of government-run plantation agency, Felda Holdings Bhd, which wasmooted in 2003, is expected to materialise under Prime Minister Datuk Seri Najib Tun Razak. Felda was the brainchild of Najib’s father, second Prime Minister Tun Abdul Razak.

The market is also waiting for the potential listing ofsubsidiaries.

In 2009, the market saw the relisting of Maxis Bhd that raised RM11.2 billion, making it the biggest listingin South-East Asia after receiving a total demand of RM26.5 billion.

The listing signifies that the local market is relevant to big companies and profiles Bursa Malaysia as an appropriate platform to raise fund.

Eng said the number of key reforms Najib had implemented had helped to revitalise corporate Malaysia.

“While Malaysia has neverpursued an isolationist policy, the efforts by the current government in reaching out to its counterparts in Saudi Arabia, China and Singaporeare more high profile and pave the way for greater cooperation at a corporate level.

The revitalisation also provides a challenge for the government-linked companies (GLCs) to scale greater heights.

GLCs were making transformation efforts to become regional and global players with encouragement from the government,” he said. — Bernama