LISTING.....Prime
Minister Datuk Seri Najib Razak (centre) holds up the prospectus for the FGVH
market listing during its launch ceremony.
KUALA LUMPUR : Despite
strong initial demand for shares in Felda Global Ventures Holdings Bhd (FGVH)
ahead of its listing, investors are unlikely to stick long with the state-run
palm oil operator based on its weak yields compared to rival firms, the Wall
Street Journal (WSJ) has said.
The international business
paper noted that the state-run commodities firm has raised US$3.1 billion
(RM9.3 billion) in sales for stocks of its initial public offering (IPO) ahead
of its debut on Bursa Malaysia tomorrow, but posted a 50 per cent drop in this
year’s first quarter profit yesterday due to higher costs in planting palm oil
trees.
“The profit slip is in
contrast to the IPO prospectus, which promoted the group’s expertise as the
world’s third-largest palm-oil plantation operator,” it said in an article
titled “Felda Plants Seeds of Investor Discontent” published yesterday.
In a scathing commentary
under its “Heard on the street” column, WSJ highlighted that Felda’s first
quarter income has barely budged, growing only 1.8 per cent from last year.
The paper noted that Felda
had given flimsy reasons for posting such poor growth, saying it had to pay a
higher-than-expected price for crude palm oil.
“There can be few excuses
for such poor foresight. A plantation company should know the cost of planting
new trees,” the paper said.
It pointed out that the palm
oil operator was planting new trees because those in its plantations were
aging, compared to those of its competitors and therefore resulted in lower
yields.
“Nasty surprises like this
won’t do much to help rekindle investor enthusiasm for IPOs. Nor are investors
likely to stick long with Felda if its prospects can wither so quickly,” WSJ
said.
FGVH is Asia’s biggest IPO
since February 2011 and the second biggest this year behind social media network
Facebook’s float, which raised US$16 billion.
The IPO of 2.188 billion
shares is currently based on an indicative retail price of RM4.55 a share with
an institutional offering of 1.915 billion shares, while settlers and employees
of Felda will gain access to 200.6 million shares, or a 5.5 per cent stake, out
of a total retail offering of 273.61 million.
This would see a total of
RM9.959 billion raised from the listing exercise, with another half a billion
ringgit available through an overallotment option of 109.4 million shares.
FVGH reported a net profit
of RM1.01 billion last year compared with RM929.4 million in 2010. Its revenue
was RM7.5 billion in 2011 and has been growing at a compounded annual rate of
61 per cent since 2009.
According to the prospectus,
RM5.5 billion in gross proceeds from the sale would accrue entirely to the
selling shareholders with RM4.5 billion going into capital expenditure. (TMI)
Any weaknesses need to be overcome in order to attract the investors to stay longer.
ReplyDeleteFelda kena akui kelemahan mereka dan berusaha mengatasinya.
ReplyDeletemoga Felda dpt atasi kelemahan mereka.
ReplyDeletetermasuklah isu2 yang tidak memuaskan hati para peneroka selama ni.
DeleteHarap para peneroka mendapat hak mereka melalui penyenaraian FGVH.
ReplyDeleteharap dgn ini, peneroka akan mendapat durian runtuh lagi.
DeleteJanji PM tetap ditunaikan.
DeleteDengan Sabah yang stabil pasti dapat menarik ramai pelabur
ReplyDeleteBuktikan kepada pelabur yang mana Malaysia adalah selamat untuk para pelabur.
ReplyDeletePenyenaraian Felda ini harap dapat membantu peneroka untuk mendapat pendapatan yang baik.
ReplyDeletekalau pembangkang tidak buat kekacauan atau huru hara dalam negara, sudah lama negara ini menjadi tumpuan pelabur..
ReplyDelete