Felda Global Ventures Holdings Bhd., which raised $3.1 billion this month in the world's second-largest initial public offering this year, showed a huge pop on its first day of trading in Malaysia.
Shares
jumped 18% on Thursday morning, helped by investors hungry for a stock that is likely to pay a good dividend yield and qualify for Malaysia's blue-chip index. The pop came despite Felda's reporting a 47% drop in first quarter net profit earlier this week, citing higher costs on planting new palm trees.
Analysts said many fund managers are piling into the stock now after being unable to buy shares through the IPO. The offering, second in size this year only to Facebook Inc.'s, was oversubscribed by more than 30 times.
"Cornerstone investors took a lot more than expected, so there's a natural supply-and-demand mismatch," says Aberdeen Asset Management managing director Gerald Ambrose.
Felda received cornerstone commitments of some $1 billion from 12 cornerstone investors, including Qatar's sovereign wealth fund and commodities trader Louis Dreyfus.
Felda's strong debut is also giving a boost to other palm oil companies, with Wilmar International, Golden Agri-Resources Ltd. and Indofood Agri Resources Ltd. all rising in Singapore.
Malaysia is enjoying a strong run in IPOs, with Gas Malaysia's listing earlier this month rising 15% on its debut. For equity capital markets bankers, healthy deal activity in Southeast Asia is keeping them busy as deals are getting pulled one after the other in Hong Kong, traditionally Asia's busiest listing destination.
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(END) Dow Jones Newswires
