Thursday, 25 December 2014

"all the IPOs this year were making money for investors", really? (2)

According to an article in The Edge (December 22, 2014) named "A dreary year for listings" 14 companies IPO-ed in 2014 on Bursa.

Excluding Only World Group (which just listed) the results are:
  • 3 are in positive area
  • 2 have the same price as the IPO
  • 8 have gone down, some considerably

That is not exactly a good score. Bearish sentiment on Bursa and in particular in the Oil & Gas industry have played an important role.

Icon Offshore was the worst performer, I wrote some cautious words about the company before.

Last year I wrote about an article in The Star, where the following quote was made:

"RHB Investment Bank Bhd director and regional head of equity capital markets Gan Kim Khoon recently said that investors should ride on the wave of Malaysia’s IPO market, but only after doing their homework on the new entrants.

He noted that all the IPOs this year were making money for investors and said this trend was likely to continue next year, when speaking at a recent panel discussion on the prospects for next year’s equity market."

That all IPO's made money in 2013 was simply not true.

And some of those listed companies did rather bad in 2014, for instance China Automobile Parts, AirAsia X, Sona Petroleum, Caring Pharmacy Group and UMW Oil & Gas.

But the advice to "ride the wave of Malaysia's IPO market" in 2014 also seems dubious, with hindsight, as the above results show.

Five years of booming share market have led to too much financial engineering, too much hot air being injected in soon to be listed companies, too much focus on the Oil & Gas industry.

Not surprisingly, things have come down to more realistic levels.

Wishing all readers Happy Holidays.


  1. Do you have a link to the edge article? I could not find it.

  2. No, I don't think it is available online