Response to Westports offering signals pent-up demand for Southeast Asian IPOs
Pricing of Malaysia's biggest port operator, one-third owned by Li Ka-shing, is at top of marketed range
Westports, the operator of Malaysia’s busiest port, priced its initial public offering at the top of its projected range to raise US$680 million, signalling a boost for Southeast Asia’s capital markets on pent-up demand for emerging market stocks.
Sources said foreign and domestic funds jostled to bid for Westports, which is partially owned by Asia’s richest man, Li Ka-Shing, taking advantage of the US Federal Reserve’s unexpected decision not to withdraw stimulus.
The result bodes well for an up to US$730 million IPO by UMW Oil & Gas in October, which is set to be Malaysia’s biggest listing of the year and could give other firms in Malaysia and Southeast Asia the confidence to push ahead with listing plans.
“Issuers in Southeast Asia are taking advantage of this new window as a result of the Fed’s surprise decision to not taper – free liquidity reigns and this has been a shot of adrenaline in the arm for emerging market risk appetite,” said James Fleming, co-head of Asia Pacific global capital markets at Bank of America Merrill Lynch in Hong Kong.
IPOs in Southeast Asia had been hit by the global market turmoil sparked by Fed chief Ben Bernanke’s comments in May that the US central bank planned to unwind its massive stimulus. Malaysian listings were also hurt by political uncertainty before general elections in May.
Westports’ book was more than 30 times oversubscribed and closed two days earlier than scheduled. Overseas demand was instrumental in pushing pricing to the top of the 2.30 Malaysian ringgit (HK$5.48) to 2.50 ringgit indicative range for institutional investors, the sources said.
Westports, which manages the world’s 12th most active port, overlooking the Malacca Straits, declined immediate comment.