Southeast Asia IPOs regain some lustre with strong Westports pricing

REUTERS - Westports Holdings, the operator of Malaysia's busiest port, priced its IPO at the top of its projected range to raise US$680 million (S$853.6 million), signalling a boost for Southeast Asia's capital markets on pent-up demand for emerging market stocks.

Sources said foreign and domestic funds jostled to bid for Westports, which is partially owned by Asia's richest man Li Ka-Shing, taking advantage of the US Federal Reserve's unexpected decision not to withdraw stimulus.

The result bodes well for an up to US$730 million IPO by UMW Oil & Gas Corp in October, which is set to be Malaysia's biggest listing of the year and could give other firms in Malaysia and Southeast Asia the confidence to push ahead with listing plans.

"Issuers in Southeast Asia are taking advantage of this new window as a result of the Fed's surprise decision to not taper - free liquidity reigns and this has been a shot of adrenaline in the arm for emerging market risk appetite," said James Fleming, co-head of Asia Pacific global capital markets at Bank of America Merrill Lynch in Hong Kong.

IPOs in Southeast Asia had been hit by the global market turmoil sparked by Fed chief Ben Bernanke's comments in May that the US central bank planned to unwind its massive stimulus. Malaysian listings were also hurt by political uncertainty before general elections in May.

Westports' book was more than 30 times oversubscribed and closed two days earlier than scheduled. Overseas demand was instrumental in pushing pricing to the top of indicative range for institutional investors, the sources said.

Westports, which manages the world's 12th most active port overlooking the Malacca Straits, declined immediate comment.

IPOs that could get a bump include a US$220 million deal by Seven Convenience, which could come in the coming months and a US$300 million floatation by property development firm Iskander Waterfront early next year.

And 2014 could be a repeat of 2012, when Malaysia was Asia's top destination for listings, with state investor 1Malaysia Development planning a US$3 billion listing for its energy assets and independent power producer Malakoff Corp looking at an up to US$1 billion IPO.