CIMB sees Malaysian IPOs of over 10b ringgit in first half of 2018

[KUALA LUMPUR] Large initial public offerings (IPOs) in Malaysia could raise more than 10 billion ringgit (S$3.31 billion) in the first half of the year, an official from CIMB Group Holdings said on Thursday.

Malaysia's IPO market saw a revival in 2017 after poor investment conditions, weak oil prices and a volatile ringgit cast a shadow over equity markets in recent years. Lotte Chemical Titan Holding raised over US$850 million in Malaysia's biggest IPO in five years in July.

IPOs in the pipeline include fast food operator QSR Brands, which is looking to raise about US$500 million, Edra Energy, which is targeting US$500 million to US$1 billion, and Bank Islam Brunei Darussalam, which is looking to raise as much as US$500 million, sources have said.

Samling Group has hired Credit Suisse, Maybank and OCBC to arrange an IPO for its automobile business that could raise up to one billion ringgit, IFR - a Thomson Reuters publication - reported on Wednesday.

"We do expect the first half should see more than 10 billion ringgit raised (from jumbo IPOs)," Derek Lim, CIMB's head of equity capital markets and syndicate Asia said at a conference.

"Small and mid-cap should continue to be quite robust as well," he said, adding that CIMB does not foresee any impact from a general election that has to called by August.

CIMB chief executive Zafrul Aziz said he expects bond and sukuk issues in Malaysia to reach 90 billion ringgit this year, supported by infrastructure projects.

Infrastructure spending in Malaysia has increased over the last year as Prime Minister Najib Razak aims to build momentum and boost the economy ahead of the general election.

Mr Zafrul also said he expects Malaysian banks to see loan growth of 4 to 5 per cent, higher than last year.

Malaysian banks are benefiting from a growing domestic economy and firm consumer spending, while improving optimism among businesses versus a year ago is supporting loan growth.

CIMB, Malaysia's second-largest lender, reported a 10.7 per cent rise in quarterly profit in November, driven by higher net interest income, lower provisions and a more robust capital market.

Mr Zafrul did not provide any 2018 financial forecasts for CIMB, but said the group's provisions for the year will be lower as Thailand and Indonesian markets are expected to improve.

REUTERS