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Resilience helps M'sia ride out economic woes

Publication Date : 11-10-2012

 

The resilience of emerging market countries including Malaysia has enabled them to ride out the worst of the economic troubles of the West, according to Goldman Sachs Group Inc vice-chairman J. Michael Evans.

“When you look at countries like Malaysia or Indonesia, those two are much less affected by the financial crisis and the problems that exist today in the Western world,” he told Bloomberg TV from Seoul, South Korea.

“And it is not a surprise to us that Malaysia continues to be one of the most attractive initial public offering (IPO) markets as a result of the fact that their economy is relatively insulated from China, the Europe and the United States.

“There will be some that do better and others that will feel the effects more directly, particularly the export-driven countries. But on balance, the resilience of these growth markets is quite extraordinary.”

Evans, who oversees emerging markets at the investment bank, added that these countries had been a growing part of its business for a long time.

“We have stated publicly that we see growth markets as one of the most significant opportunities for the firm.

“And I suspect, given how well they performed through the current crisis, that if things get even a bit better in the Europe and US, we can count on them to make a more substantial contribution in the future.”

Thomson Reuters had revealed last week in its Investment Banking Scorecard that Kuala Lumpur was now fourth in the world behind Nasdaq, the New York Stock Exchange and Tokyo First Section in terms of share proceeds.

With the comeback listing of Astro Malaysia Holdings Bhd slated for the end of next week, Malaysia has become Asia’s top destination for initial public offerings (IPOs) this year, accounting for US$7.9 billion (22.3 billion ringgit), or nearly one-quarter, of the $30.03 billion (92.31 billion ringgit) worth of new listings in the Asia-Pacific.

This puts it ahead of regional powerhouses Hong Kong and Singapore, which have raised $1.81 billion (5.56 billion ringgit) and $3.44 billion (10.57 billion ringgit) respectively thus far, as well as the $1.8 billion (5.53 billion ringgit).

Malaysia achieved in the same period last year and its previous record of $6.9 billion (21.21 billion ringgit) set in 2010.

The wave of mega-IPOs here has put Malaysia on the world map and on the radar of global fund managers, reports say.

Plantation-based Felda Global Ventures Holdings, the world’s second largest IPO behind Facebook, garnered some $3.3 billion (10.1 billion ringgit), while Asia’s largest hospital operator IHH Healthcare Bhd was floated at more than $2 billion (6.1 billion ringgit).

Astro, which is returning to the market with a $5.02 billion (15.36 billion ringgit) valuation, recently priced its institutional offering at the top end of a marketing range at 3 ringgit, raising $1.5 billion (4.8 billion ringgit) and making it the world’s sixth largest flotation exercise.

 

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