10 Largest Malaysian IPOs

Below is a list of the ten largest IPOs in the last ten years on Bursa Malaysia.


                              == Market Cap ==
Company          IPO date      IPO       Now     Change
Petronas Chem   26/11/2010    42,480    53,600     26%
Maxis           19/11/2009    40,650    44,836     10%
IHH             25/07/2012    24,891    54,855    120%
Felda           28/06/2012    19,335     5,363    -72%
Astro           19/10/2012    15,592    15,199     -3%
Bumi Armada     21/07/2011    12,124     4,165    -66%
Westports       18/10/2013     9,037    14,356     59%
Malakoff        15/05/2015     9,000     8,400     -7%
UMW O&G         01/11/2013     6,702     2,000    -70%
AirAsia X       10/07/2013     2,963     1,452    -51%


Some comments:

• 6 out of 10 companies are still below their IPO price, that is not impressive at all
• if one would put the same amount of money in each stock, then one would have a loss of 5%
• on average the companies IPO-ed about 3.5 years ago
• for international investors, the RM is down by about 20% versus the USD since 3.5 years ago, so the results are much worse
• the market cap off all 10 companies together has risen though, since their combined IPOs
• it is mostly IHH saving the day, with EPF continuing to buy IHH shares aggressively even at a rich PE of around 60
• Maxis, Astro, Bumi Armada and Malakoff are all "listed-delisted-relisted" cases, Bursa should really take decisive action to discourage this kind of financial engineering which comes at the expense of the minority shareholders, it is long overdue
• quite a few resource related companies on the list, they have not fared well lately

There was once a time when companies were listed at single digit PEs supported by profit guarantees, the valuation was set by the authorities. Needless to say, there was a lot of interest by investors, and some IPOs were oversubscribed by 100 times.

Those days are over, companies nowadays set their own price, which is of course correct. New, "sexy" terms were introduced by financial engineers, like "cornerstone investors", "greenshoe options" and "stabilising manager".

But from the above data, it seems the IPO price is often quite rich these days, and not much upside (if any) is provided in exchange for the risk that IPO investors take.

Combined with my previous posting about poor earnings growth for the Top 30 companies (not surprisingly there is quite some overlap), things don't look that impressive.

Bursa can hold as many international roadshows as they want, but at the end of the day, it is the fundamentals and valuations that count. And they really have to improve.

Malakoff associate gets penalty of RM 157M

MMC Corporation announced regarding legal proceedings against an associate company of Malakoff  in connection with sea water desalination plant in the district of Tlemcen, Algeria:


"...that MCB [Malakoff Corporation Bhd] had been informed by AAS [Almiyah Attilemcania Spa] solicitors on 30 December 2014 that the lower court of Ghazouet (“Court”) in the district of Tlemcen has imposed a penalty of DZD3,929,038,151.36 (approximately US$44.6 million at the exchange rate of US$1=DZD88) on AAS in respect of the Legal Proceedings (“Penalty”).

AAS has been advised by its solicitors that the Penalty would not be enforced until the exhaustion of all rights to appeal by AAS in respect of the Legal Proceedings. AAS had filed an appeal against the decision of the Court to the Algerian Court of Appeal."


That is quite a high penalty, it is not often that one sees a penalty of more than RM 100 million.

The Malaysian press has been rather silent about the case. Some more details can be found in this announcement:


3. During the financial year 2009, it was discovered that there was a considerable gap between the value of the delivered equipment and the value of the payment made by AAS to the supplier cum contractor (“Invoice Gap”). AAS wrote to the supplier cum contractor requesting for clarifications as they are responsible to resolve tax and customs issues. The invoice gap however was not resolved by the supplier cum contractor and the Algerian Customs then initiated investigations and thereafter the charge was brought against AAS.

4. Due to the Invoice Gap, it is alleged that AAS has failed to repatriate a sum of USD26,900,000. No interest is imposed in the Legal Proceedings but the Court can impose penalty as it deems fit.


Malakoff is planning a relisting exercise, after having been listed and subsequently delisted before. The kind of "games" that are often played by Malaysian tycoons on Bursa. The valuation at relisting is often very much higher than the valuation when the company was delisted. Unfortunately, there is not much that minority investors can do against this practice.