Malaysia IPO Spree Set to Continue in 2013, Bursa Says

Bursa Malaysia Bhd., the country’s stock exchange manager, said it expects the spree of initial public offerings in the nation to continue into 2013 as share sales head close to a record this year.

Kuala Lumpur has risen to become the world’s fourth largest center for IPOs in 2012, overtaking financial hubs including London, according to data compiled by Bloomberg. Three of Asia’s four biggest first-time share sales this year have come from Malaysia, which has raised a total $6.8 billion, the data show.

“We are enjoying our moment in the spotlight,” Tajuddin Atan, chief executive officer of Bursa Malaysia, said in a Bloomberg television interview in Hong Kong today. “Our market is seeing a very exciting time. Malaysian companies are growing regionally so the need for capital continues.”

Malaysian IPOs this year are close to the $7.05 billion record raised in 2010 when Petronas Chemicals Group Bhd. completed a 12.8 billion ringgit ($4.2 billion) offering. While first-time sales have been shrunk or canceled elsewhere, demand for shares exceeded supply in Kuala Lumpur when Felda Global Ventures Holdings Bhd. raised $3.3 billion, IHH Healthcare Bhd. sold $2.1 billion of stock and Astro Malaysia Holdings Bhd. issued $1.5 billion of shares.

‘Regional Champions’

Barring changes in the economy, the volume of Malaysian IPOs in 2013 should be “at least equal” to this year, Tajuddin said. “We’re seeing Malaysian companies becoming bigger and growing at a faster pace in tandem with the Malaysian economy and Asean economic growth. These companies are becoming regional champions.” Asean is the 10-member Association of Southeast Asian Nations.

Power producer Malakoff Bhd. and long-haul budget airline AirAsia X Bhd. are among companies which have said they plan to list in Kuala Lumpur in 2013. Malaysia’s benchmark FTSE Bursa Malaysia KLCI Index closed at a record on Nov. 1 and has climbed 7 percent so far this year.

Investors have drawn partly on optimism that Malaysia’s economy will continue to weather the effects of Europe’s credit contagion. Gross domestic product growth may expand by as much as 5.5 percent next year from an estimated 5 percent in 2012, the finance ministry forecast in a report in September.

Boosting Consumption

Malaysian Prime Minister Najib Razak cut personal income tax, raised civil servants’ minimum pensions and repeated cash handouts to low-income households in his budget speech in September, after increasing civil servants’ salaries in the past year to boost domestic consumption.

Growth in five Asean economies -- Indonesia, Thailand, Philippines, Malaysia and Vietnam -- will probably outpace the U.S. and the euro region next year, the International Monetary Fund said in a report in October.

The Asean-5 will grow 5.8 percent in 2013, compared with 2.1 percent in the U.S., 0.2 percent in the euro region and 1.2 percent in Japan, it said. The other five members of Asean are Brunei, Cambodia, Laos, Myanmar and Singapore.

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