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Thursday, 1 October 2009
Volatile market forces Wilmar rethink Hong Kong IPO
Singapore’s Wilmar, the world’s biggest listed palm oil producer, is likely to delay the US$3 billion listing of its mainland unit in Hong Kong as concerns about frothy markets hurt investor sentiment.
Volatile market forces Wilmar rethink Hong Kong IPO
Reuters in Singapore 30 September 2009
Singapore’s Wilmar, the world’s biggest listed palm oil producer, is likely to delay the US$3 billion listing of its mainland unit in Hong Kong as concerns about frothy markets hurt investor sentiment.
The firm said on Wednesday that its plans to list the mainland operation are still in progress but it has not made a decision on timing, which will depend on market conditions.
UBS and BoA-Merrill Lynch said in research reports on Wednesday that Wilmar will delay the IPO from an end-October schedule, because of a volatile or weak Hong Kong IPO market.
A rebound in Asian share markets has encourage a glut of stock deals recent weeks, some of which have struggled. Still, Las Vegas casino company Wynn Resorts priced its Macau IPO at the top of its indicated range, sources said on Wednesday, a sign demand is still strong for certain offerings.
“The listing of Wilmar China Limited on The Stock Exchange of Hong Kong Limited is still in progress and has reached an advanced stage but no decision has been taken as to the specific timing of the listing,” Wilmar said in a statement.
“The structure and the expected timetable have not been finalised and are dependent on market conditions.”
UBS analyst Andreas Bokkenheuser said he believed Wilmar had no immediate need to raise capital in an initial public offering that he said could raise US$2.5 to US$3 billion.
Wilmar’s share price fell as much as 6 per cent to its lowest in almost six weeks before recovering to trade 3.2 per cent lower at S$6.30 (HK$34.40) – still underperforming Singapore’s benchmark index, which was down 0.7 per cent.
The stock has risen 125 per cent since the start of the year, outperforming a 50 per cent gain in the Singapore market.
Deutsche Bank said in a report that the IPO delay could send Wilmar’s shares back to the level seen before the company announced its plan to list its mainland operation in May.
“Wilmar will unlock the value of its China asset, we believe. It is just a matter of finding the right market conditions,” Su-Yin Teoh, strategist at Deutsche Bank, said in the report.
“As far as valuations, we believe that Wilmar shares might pull back temporarily to its pre-China listing news flow levels of around S$5.50. Fundamentals remains strong given China’s increasing demand for basic food.”
Both Deutsche Bank and UBS said the recent pullback in Wilmar’s share price provided a buying opportunity. UBS has a “buy” recommendation and Deutsche Bank has a “hold” rating.
Wilmar has appointed BOC (SEHK: 3988) International, Goldman Sachs and Morgan Stanley to handle an IPO that sources have also said could raise as much as US$3 billion.
It had said it plans to list between 20-30 per cent of its mainland unit, but its CEO has said there would be no problem listing 51 per cent of the stake.
Wilmar, which owns oil palm plantations and runs milling, crushing, refining and processing plants in Indonesia and Malaysia, has said the mainland operation generated about US$600 million in profit and US$14.3 billion in revenues last year.
Mainland accounts for about half its overall sales.
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Volatile market forces Wilmar rethink Hong Kong IPO
Reuters in Singapore
30 September 2009
Singapore’s Wilmar, the world’s biggest listed palm oil producer, is likely to delay the US$3 billion listing of its mainland unit in Hong Kong as concerns about frothy markets hurt investor sentiment.
The firm said on Wednesday that its plans to list the mainland operation are still in progress but it has not made a decision on timing, which will depend on market conditions.
UBS and BoA-Merrill Lynch said in research reports on Wednesday that Wilmar will delay the IPO from an end-October schedule, because of a volatile or weak Hong Kong IPO market.
A rebound in Asian share markets has encourage a glut of stock deals recent weeks, some of which have struggled. Still, Las Vegas casino company Wynn Resorts priced its Macau IPO at the top of its indicated range, sources said on Wednesday, a sign demand is still strong for certain offerings.
“The listing of Wilmar China Limited on The Stock Exchange of Hong Kong Limited is still in progress and has reached an advanced stage but no decision has been taken as to the specific timing of the listing,” Wilmar said in a statement.
“The structure and the expected timetable have not been finalised and are dependent on market conditions.”
UBS analyst Andreas Bokkenheuser said he believed Wilmar had no immediate need to raise capital in an initial public offering that he said could raise US$2.5 to US$3 billion.
Wilmar’s share price fell as much as 6 per cent to its lowest in almost six weeks before recovering to trade 3.2 per cent lower at S$6.30 (HK$34.40) – still underperforming Singapore’s benchmark index, which was down 0.7 per cent.
The stock has risen 125 per cent since the start of the year, outperforming a 50 per cent gain in the Singapore market.
Deutsche Bank said in a report that the IPO delay could send Wilmar’s shares back to the level seen before the company announced its plan to list its mainland operation in May.
“Wilmar will unlock the value of its China asset, we believe. It is just a matter of finding the right market conditions,” Su-Yin Teoh, strategist at Deutsche Bank, said in the report.
“As far as valuations, we believe that Wilmar shares might pull back temporarily to its pre-China listing news flow levels of around S$5.50. Fundamentals remains strong given China’s increasing demand for basic food.”
Both Deutsche Bank and UBS said the recent pullback in Wilmar’s share price provided a buying opportunity. UBS has a “buy” recommendation and Deutsche Bank has a “hold” rating.
Wilmar has appointed BOC (SEHK: 3988) International, Goldman Sachs and Morgan Stanley to handle an IPO that sources have also said could raise as much as US$3 billion.
It had said it plans to list between 20-30 per cent of its mainland unit, but its CEO has said there would be no problem listing 51 per cent of the stake.
Wilmar, which owns oil palm plantations and runs milling, crushing, refining and processing plants in Indonesia and Malaysia, has said the mainland operation generated about US$600 million in profit and US$14.3 billion in revenues last year.
Mainland accounts for about half its overall sales.
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