Petronas Chemicals Group (PCG) has received orders for about 21 times the shares available in its RM12.8 billion initial public offering (IPO) for institutional offering. The retail offering of 293 million shares was oversubscribed by 2.5 times.
Shares were priced at RM5.20 each for institutions while individual investors get 3 percent discount at RM5.05. Demand for the shares exceededing the supply, with the institutional offering attracting orders for about RM92.6 billion worth of shares. The IPO values Petronas Chemicals at RM38.8 billion, or 16.3 times profit, a 38 percent premium to the industry median.
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Recently, we heard news about Singapore Exchange (SGX) agreed to a US$8.3 billion takeover of Australia’s ASX Ltd. The merger will create Asia’s fourth-largest and World’s eight-largest stock exchange.
With the above news it is interesting to know the biggest stock exchange in the world. The following table shows the largest stock exchange around the world in terms of market capitalization as of September 2010. It also shows the number is listed companies as its performance for the past 1 year. It also interesting to know how is our local exchange, Bursa Malaysia perform.
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Since March 2010, EPF reveal its top 30 equity investments in Bursa Malaysia on quarterly basis. The aim for this is to promote greater transparency and to reassure members that investment undertaken are in the best interest of growing their retirement savings and in accordance to best practices in investment and governance.
The table below shows quarter 3 2010 Top 30 Equity Investments in companies listed on Bursa Malaysia as of 30th September 2010.
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When Petronas Chemicals Group (PCG) will make its debut on Bursa Malaysia on 26th November 2010, collectively Petronas group will account for over 10 per cent of Bursa Malaysia’s total market capitalisation and over 16 per cent of the FBM KLCI.
PCG debut on Bursa Malysia is the second initial public offering (IPO) by Petroliam Nasional Bhd this year. Last October, Petronas Rig builder, Malaysia Marine and Heavy Engineering Bhd (MHB), made its debut on Bursa Malaysia, jumped 19 per cent to RM4.51 in its first trading day.
With the inclusion of the PCG’s IPO and MHB, Petronas will have six companies listed on Bursa Malaysia, with a total market capitalisation of RM124 billion. The other four companies are MISC Bhd, Petronas Dagangan Bhd, Petronas Gas Bhd and KLCC Property Holdings Bhd
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We believe that Bank Negara’s latest measures in capping the LTV ratio would have very limited impact on the real property sector. In continuing with our theme, we maintain our OVERWEIGHT call on the Malaysian property sector and advise investors to accumulate on midto high-end residential property developers, particularly those with primary focus on mid- to high-end landed properties in Malaysia. Any knee-jerk reaction on the latest measure will present an opportunity for investors to accumulate.
The table below are the target price for selected developers in property sector.
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