Felda shares surge – Qatar is key investor

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Felda’s CEO Sabri Ahmad at the IPO at the Bursa Malaysia on June 28.

In what was the world’s second largest IPO after Facebook went public in May this year, Malaysian oil palm plantation operator Felda Global Ventures Holding saw its shares surge more than 16 per cent on the company’s debut IPO on Thursday, June 28, and holding the price level on the second day.

This is good news for Qatar Holding LLC, part of the Gulf state’s sovereign wealth fund, who is said to be a cornerstone investor in the IPO having taken a “substantial stake”, Reuters quoted an unnamed source with direct knowledge of the deal.

It is the first time a Middle Eastern sovereign wealth fund has acted as a cornerstone investor in a Malaysian IPO. Other core investors of Felda include Fidelity Investments, Hong Kong-based Value Partners, AIA Group, and Singapore’s sovereign wealth fund GIC.

Felda,¬† the world’s third-largest palm-oil plantation company by acreage, raised $3.1 billion in Asia’s biggest IPO of the year. The company’s CEO Sabri Ahmad said that $800 million will be used for replanting oil palm trees, and the rest for expansion of the land bank and the refinery business as well as for takeovers. Felda is planning to acquire an palm oil refinery in Indonesia by December 2012 and also wants to purchase plantation land in Southeast Asia and Africa.

Hundreds of thousands of plantation farmers and their family members will reap a windfall through IPO-related handouts and discounted shares, giving the Malaysian government a political dividend ahead of elections this year.

The strong IPO shows the huge interest in Southeast Asia’s capital markets by investors who turned away from Europe and the US after the prolonged debt crises in these regions.

Other large IPOs so far this year were that of a Thai property fund launched by UK retailer Tesco, the biggest IPO in Thailand since 2006. The Thai stock exchange also saw the listing of holding company of Thai AirAsia. The first largest Asian IPO thus far this year, until Felda, was that of a Philippine company, GT Capital Holdings Inc. According to Bloomberg, Tesco Lotus shares have gained 18 per cent since the public offering, while those in GT Capital have risen 5.7 per cent.

The next IPO planned in Malaysia is the $2 billion initial public offering of IHH Healthcare,¬† a unit of Malaysia’s state investor Khazanah, in August.

Meanwhile, the IPO of motor racing company Formula One. planned in Singapore and estimated at a value of $3 billion, has been delayed.

Inner Mongolia’s Yitai Coal has started investor education for its IPO of up to $1.5 billion in Hong Kong, probably this year.

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Reading Time: 2 minutes

Felda’s CEO Sabri Ahmad at the IPO at the Bursa Malaysia on June 28.

In what was the world’s second largest IPO after Facebook went public in May this year, Malaysian oil palm plantation operator Felda Global Ventures Holding saw its shares surge more than 16 per cent on the company’s debut IPO on Thursday, June 28, and holding the price level on the second day.

Reading Time: 2 minutes

Felda’s CEO Sabri Ahmad at the IPO at the Bursa Malaysia on June 28.

In what was the world’s second largest IPO after Facebook went public in May this year, Malaysian oil palm plantation operator Felda Global Ventures Holding saw its shares surge more than 16 per cent on the company’s debut IPO on Thursday, June 28, and holding the price level on the second day.

This is good news for Qatar Holding LLC, part of the Gulf state’s sovereign wealth fund, who is said to be a cornerstone investor in the IPO having taken a “substantial stake”, Reuters quoted an unnamed source with direct knowledge of the deal.

It is the first time a Middle Eastern sovereign wealth fund has acted as a cornerstone investor in a Malaysian IPO. Other core investors of Felda include Fidelity Investments, Hong Kong-based Value Partners, AIA Group, and Singapore’s sovereign wealth fund GIC.

Felda,¬† the world’s third-largest palm-oil plantation company by acreage, raised $3.1 billion in Asia’s biggest IPO of the year. The company’s CEO Sabri Ahmad said that $800 million will be used for replanting oil palm trees, and the rest for expansion of the land bank and the refinery business as well as for takeovers. Felda is planning to acquire an palm oil refinery in Indonesia by December 2012 and also wants to purchase plantation land in Southeast Asia and Africa.

Hundreds of thousands of plantation farmers and their family members will reap a windfall through IPO-related handouts and discounted shares, giving the Malaysian government a political dividend ahead of elections this year.

The strong IPO shows the huge interest in Southeast Asia’s capital markets by investors who turned away from Europe and the US after the prolonged debt crises in these regions.

Other large IPOs so far this year were that of a Thai property fund launched by UK retailer Tesco, the biggest IPO in Thailand since 2006. The Thai stock exchange also saw the listing of holding company of Thai AirAsia. The first largest Asian IPO thus far this year, until Felda, was that of a Philippine company, GT Capital Holdings Inc. According to Bloomberg, Tesco Lotus shares have gained 18 per cent since the public offering, while those in GT Capital have risen 5.7 per cent.

The next IPO planned in Malaysia is the $2 billion initial public offering of IHH Healthcare,¬† a unit of Malaysia’s state investor Khazanah, in August.

Meanwhile, the IPO of motor racing company Formula One. planned in Singapore and estimated at a value of $3 billion, has been delayed.

Inner Mongolia’s Yitai Coal has started investor education for its IPO of up to $1.5 billion in Hong Kong, probably this year.

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