Malaysia was an unlikely hub of activity in a slow year for IPO issuance, and one bank was perfectly placed to capitalise. For lifting the market to new heights and attracting both international and domestic investors, CIMB is IFR Asia’s Malaysia Equity House of the Year.
Malaysia’s cash-rich domestic investor base and the quality of its listing candidates have taken the country’s equity capital markets to a new level. With competition hotting up, CIMB dominated, and did a commendable job in selling the Malaysian growth story without causing investor fatigue.
CIMB’s dominance was stunning. It was on seven of the 10 largest deals. It helped to raise US$7.4bn, or 95% of the total funds raised through IPOs in IFR Asia’s review period. In share placements, CIMB completed deals worth US$1.7bn, or 46% of the total funds raised.
Quantity was not the only aspect in CIMB’s favour. It also ensured the IPOs had quality by roping in the big-ticket cornerstone investors. CIMB’s acquisition during the year of certain Royal Bank of Scotland businesses enhanced its global distribution network and helped it attract investors across the board.
CIMB was joint global co-ordinator on the M$10.4bn (US$3.3bn) IPO of Felda Global Ventures, a deal that opened the floodgates for Malaysia. Felda was the third largest Malaysian IPO on record and one of the largest global floats during the year.
CIMB brought in eight of the 12 cornerstone investors, including Qatar Holdings, which became the first Middle Eastern cornerstone investor to participate in a Malaysian IPO. The deal drew a blowout response with the institutional portion, excluding the cornerstones, 45 times subscribed.
CIMB also helped pioneer the first simultaneous dual listing in Singapore and Malaysia. With the US$2bn, 2.2bn-share dual listing of IHH Healthcare, the bank also showed it could execute complex deals.
CIMB also had to fill in the gaps related to a new IHH acquisition in Turkey, and the business’ growth since it delisted some of its operations between 2007 and 2010.
Investors’ concerns were obviously addressed, as the IPO drew 22 cornerstone investors – a record in South-East Asia. CIMB secured a third of the cornerstones, including the biggest single buyer, Malaysia’s Employees Provident Fund.
The institutional tranche was more than 130x covered at the top end of guidance. Globally, more than 400 accounts participated.
Despite the blowout books for both Felda and IHH, both were priced slightly off the top to make the transactions attractive to investors. Felda was priced at M$4.55 per share, from a M$4.00–$4.65 indicative range, while IHH was priced at M$2.80 a share, slightly off the M$2.67–$2.85 guidance range.
CIMB managed not only the IPOs of government-linked companies, but also of private companies and real estate investment trusts. The REIT IPOs it handled were notable for their low yields, helping clients take full advantage of market conditions.
CIMB managed the US$232m IPO of Pavilion REIT in December 2011 and generated orders from anchor investors for more than twice the institutional offer of 490m shares. The institutional book finished 28x covered and the IPO was priced at a 2012 dividend yield of 6.58%
The US$273m IGB REIT IPO was priced at a 2013 dividend yield of 5.37%, the lowest for a Malaysian REIT since August 2005. The IPO was not marketed to cornerstone investors due to its small size, but CIMB generated 40% of the global demand and almost twice the demand of the second-placed bank.
Astro Malaysia’s US$1.5bn IPO was also well-received during bookbuilding, with the institutional portion 37x subscribed.
CIMB was also the joint bookrunner on the US$741m block trade in Maxis, the second largest such deal in Malaysia. The transaction drew a strong response from anchor investors and was covered within an hour. It was also the sole bookrunner on Bumi Armada’s US$379m block trade.
To see the digital version of this report, please click here.