PETALING JAYA: Maxis Bhd’s huge shares offering was lapped up by investors hungry for quality local stock, but some investment funds and their clients were dismayed by the “small” portion of initial public offering (IPO) shares allocated to them.
Industry sources said some local funds received less than 5% of the amount they had bid for, despite many putting in bids at strike prices (meaning that they were willing to take the shares at any given price) or at the top end of the indicative price range.
Maxis on Tuesday said the institutional offering – excluding shares reserved for cornerstone investors and bumiputera investors approved by the International Trade and Industries Ministry (Miti) – was 3.7 times oversubscribed.
That translated to a demand worth RM19.3bil from local and foreign fund managers for shares valued at RM5.3bil offered by Maxis at RM5 each. The 1.06 billion shares allocated under the institutional portion was distributed almost in equal part between local and foreign fund managers.
Meanwhile, the retail portion of 212.3 million IPO shares was oversubscribed by 1.8 times.
In total, Maxis attracted bids worth RM26.5bil for its IPO of 2.25 billion shares.
Maxis’ share sale raised RM11.2bil, which makes it the biggest IPO in South-East Asia to date.
James Lau, senior director-equities of Kenanga Investment Bank Bhd, shares his clients’ disappointment at receiving only a small allocation of Maxis stock.
“Even though the small allocation to funds bodes well for the post-listing market of Maxis shares, we had hoped for more shares,” he said, adding that in the bigger picture, with Maxis shares being offered as an “entree” to attract first-time foreign investors here, the small allocation to local funds may be a justified trade-off.
Lau said, however, that he hoped for more transparency in the allocation process “so that investors can better understand the situation and don’t feel overly disappointed by the small allocation.”
Maxis said the book-building exercise attracted “significant” foreign interest, including from 10 new institutional funds, as well as sovereign wealth funds.
“They (the promoters) could have done more roadshows to explain the whole deal to a wider group of investors,” said Rusli Abu Yamin, chief investment officer (CIO) at ASM Investment Services.
“That would have reduced a lot of confusion on how the IPO was structured and priced,” he added.
ASM Investment Services is a wholly-owned unit of Amanah Saham Mara Bhd, which gets its portion of Maxis shares via reserved units for Miti-approved bumiputra investors.
ASM put in a bid of RM5.50, but as the final price was reduced to RM5 a piece for institutional investors, the difference would be refunded to ASM within 10 days.
Rusli said the excess fund could be parked in money markets, and the issuing house should consider sharing part of the interest earned during that 10-day period with investors.
“Some funds get less than what they had applied for and given the size of the bids, the amount could be substantial,” he said.
OSK-UOB Investment Unit Trust Management Bhd CIO Jason Chong said he was “happy” with the amount of Maxis shares allocated to the fund.
“The IPO was priced at the lower end, which is good for us as this translates to higher upside potential,” he said.
Industry sources said some local funds received less than 5% of the amount they had bid for, despite many putting in bids at strike prices (meaning that they were willing to take the shares at any given price) or at the top end of the indicative price range.
Maxis on Tuesday said the institutional offering – excluding shares reserved for cornerstone investors and bumiputera investors approved by the International Trade and Industries Ministry (Miti) – was 3.7 times oversubscribed.
That translated to a demand worth RM19.3bil from local and foreign fund managers for shares valued at RM5.3bil offered by Maxis at RM5 each. The 1.06 billion shares allocated under the institutional portion was distributed almost in equal part between local and foreign fund managers.
Meanwhile, the retail portion of 212.3 million IPO shares was oversubscribed by 1.8 times.
In total, Maxis attracted bids worth RM26.5bil for its IPO of 2.25 billion shares.
Maxis’ share sale raised RM11.2bil, which makes it the biggest IPO in South-East Asia to date.
James Lau, senior director-equities of Kenanga Investment Bank Bhd, shares his clients’ disappointment at receiving only a small allocation of Maxis stock.
“Even though the small allocation to funds bodes well for the post-listing market of Maxis shares, we had hoped for more shares,” he said, adding that in the bigger picture, with Maxis shares being offered as an “entree” to attract first-time foreign investors here, the small allocation to local funds may be a justified trade-off.
Lau said, however, that he hoped for more transparency in the allocation process “so that investors can better understand the situation and don’t feel overly disappointed by the small allocation.”
Maxis said the book-building exercise attracted “significant” foreign interest, including from 10 new institutional funds, as well as sovereign wealth funds.
“They (the promoters) could have done more roadshows to explain the whole deal to a wider group of investors,” said Rusli Abu Yamin, chief investment officer (CIO) at ASM Investment Services.
“That would have reduced a lot of confusion on how the IPO was structured and priced,” he added.
ASM Investment Services is a wholly-owned unit of Amanah Saham Mara Bhd, which gets its portion of Maxis shares via reserved units for Miti-approved bumiputra investors.
ASM put in a bid of RM5.50, but as the final price was reduced to RM5 a piece for institutional investors, the difference would be refunded to ASM within 10 days.
Rusli said the excess fund could be parked in money markets, and the issuing house should consider sharing part of the interest earned during that 10-day period with investors.
“Some funds get less than what they had applied for and given the size of the bids, the amount could be substantial,” he said.
OSK-UOB Investment Unit Trust Management Bhd CIO Jason Chong said he was “happy” with the amount of Maxis shares allocated to the fund.
“The IPO was priced at the lower end, which is good for us as this translates to higher upside potential,” he said.
xtracted from : The Star By RISEN JAYASEELAN and IZWAN IDRIS
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You have to express more your opinion to attract more readers, because just a video or plain text without any personal approach is not that valuable. But it is just form my point of view
You have to express more your opinion to attract more readers, because just a video or plain text without any personal approach is not that valuable. But it is just form my point of view
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