The outlook for fund raising activity in the capital market looks promising in the first-half of next year, so says Maybank Investment Bank .
“Judging from the last two quarters and going forward, the next first-half of 2011 is promising. We have seen the success of the recent new listings or initial public offerings (IPOs),” its Chief Executive Officer Tengku Datuk Zafrul Tengku Abdul Aziz said.
The new listing are that of Malaysia Marine And Heavy Engineering Holdings Bhd on October 29, and Petronas Chemicals Group Bhd which is scheduled for listing on November 26.
Tengku Zafrul said the local stock market is active based on the market volume and value traded, and also the high level of investments from foreign investors, in terms in foreign shareholdings and participation.
“Fund raising activity would continue in the first-half of 2011 based on new IPOs in the pipeline. We expect positive growth as the pipeline is better than what we have done so far this year,” he said.
Tengku Zafrul also said there are several new listings in the pipeline and this is healthy, adding that the trend would likely to continue.
He said the market also saw placement activities taking place this year namely the Telekom Malaysia Bhd and Malaysia Airports Holdings Bhd, adding that placement exercises would boost trading activity.
“Hopefully, with the continuation of these placements by Khazanah or other bigger investment companies, will create a bigger free float for investors to come in and trade in the stock market.
“The liquidity is there but free float is not as big as other developed countries because our shares are tightly held by big institutions. So there are no opportunities for foreigners or private investors,” Tengku Zafrul said.
He said with these kind of placements in the market, it will not only offer an opportunity to foreigners and private investors, but will also boost the share price of the company.
Tengku Zafrul said the local stock market continued to be strong not only in volume but also the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) was at a healthy level. “Reaching 1,600 is not impossible,” he said.
The FBM KLCI closed 6.24 points higher at 1,506.05 yesterday compared with last week’s 1,499.81.
Tengku Zafrul said among the factors that would continue to support the local bourse are rising foreign liquidity inflow, particularly, from the United States, Europe as well as Asia, amid a higher return in this region.
On the Malaysian economy, Tengku Zafrul said the Gross Domestic Product (GDP) for this year would be around seven per cent and growth would moderate next year at six per cent. Bank Negara Malaysia is scheduled to release third-quarter GDP figures next Monday.
“Looking at that, the market will consolidate. But for the first six-months it still looks strong. I do not think there will be a double-dip recession as the economy is growing and the market is performing well,” he added.
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