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PR Newswire
12-04-2012, 06:09 PM
Business Times
Published April 12, 2012
Bumitama IPO 30 times subscribed
Initial public offer pipeline likely to be strong in Q2: HSBC
By lim wei sheng
THE initial public offering of Indonesian palm oil producer Bumitama Agri has attracted overwhelming response from investors, with a subscription rate of over 30 times for 297.5 million shares.
It comprises over 155 million placement shares, 124.8 million cornerstone shares, 15 million public offer shares and 2.7 million management reserved shares.
The public offer tranche drew 14,518 valid applications, with application monies totalling $461.8 million for 619.8 million shares.
The Bumitama IPO launch is the second in Singapore this year, after private cord blood bank Cordlife last month.
The pipeline for IPOs is likely to be strong in the second quarter, according to HSBC head of equity capital markets for South-east Asia Matthew Song, especially since many planned IPOs last year were postponed due to unfavourable market conditions.
Said Mr Song: "With the Hang Seng and Straits Times Index up by about 10 per cent in the first quarter, many issuers were caught by surprise by the surge in the first quarter, and are hence likely to consider issuing in the second quarter."
However, Cheah Le Sa, managing director of equity capital markets at DBS, was more cautious, saying: "Markets are likely to continue to be volatile, hence investors are likely to exercise a lot of differentiation, being highly selective based on the quality of the issuers."
DBS and HSBC were the underwriters for Bumitama's IPO.
Bullish sentiment on Bumitama's stock is likely to spill over into the secondary market, with Macquarie Bank listing two new structured call warrants for Bumitama at exercise prices of 85 cents and $1, expiring on July 2 and Sept 3 respectively this year.
Said Barnaby Matthews, head of derivatives at Macquarie: "We foresee high retail investor demand for the stock, especially since the institutional placement was over 30 times subscribed.
"As such, the warrants will cater to investors who want access but missed out on the IPO . . . investors who foresee a rally in (Bumitama's) stock in the short to medium term."
Mr Matthews added that the warrants were likely to be priced at three to four cents based on underlying asset value.
Bumitama shares, as well as the warrants, start trading today.
Published April 12, 2012
Bumitama IPO 30 times subscribed
Initial public offer pipeline likely to be strong in Q2: HSBC
By lim wei sheng
THE initial public offering of Indonesian palm oil producer Bumitama Agri has attracted overwhelming response from investors, with a subscription rate of over 30 times for 297.5 million shares.
It comprises over 155 million placement shares, 124.8 million cornerstone shares, 15 million public offer shares and 2.7 million management reserved shares.
The public offer tranche drew 14,518 valid applications, with application monies totalling $461.8 million for 619.8 million shares.
The Bumitama IPO launch is the second in Singapore this year, after private cord blood bank Cordlife last month.
The pipeline for IPOs is likely to be strong in the second quarter, according to HSBC head of equity capital markets for South-east Asia Matthew Song, especially since many planned IPOs last year were postponed due to unfavourable market conditions.
Said Mr Song: "With the Hang Seng and Straits Times Index up by about 10 per cent in the first quarter, many issuers were caught by surprise by the surge in the first quarter, and are hence likely to consider issuing in the second quarter."
However, Cheah Le Sa, managing director of equity capital markets at DBS, was more cautious, saying: "Markets are likely to continue to be volatile, hence investors are likely to exercise a lot of differentiation, being highly selective based on the quality of the issuers."
DBS and HSBC were the underwriters for Bumitama's IPO.
Bullish sentiment on Bumitama's stock is likely to spill over into the secondary market, with Macquarie Bank listing two new structured call warrants for Bumitama at exercise prices of 85 cents and $1, expiring on July 2 and Sept 3 respectively this year.
Said Barnaby Matthews, head of derivatives at Macquarie: "We foresee high retail investor demand for the stock, especially since the institutional placement was over 30 times subscribed.
"As such, the warrants will cater to investors who want access but missed out on the IPO . . . investors who foresee a rally in (Bumitama's) stock in the short to medium term."
Mr Matthews added that the warrants were likely to be priced at three to four cents based on underlying asset value.
Bumitama shares, as well as the warrants, start trading today.
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