by Staff Writers
Kuala Lumpur (AFP) June 28, 2012
Shares in Malaysian palm oil giant Felda Global jumped nearly 20 percent on their stock market debut Thursday, defying global economic uncertainty in the second-largest IPO this year after Facebook.
Analysts predict that consumption of palm oil, a key ingredient in many everyday items such as soap and a range of food products, is set to soar in coming years, fuelled by growth in Asian economies.
Felda Global jumped 18.46 percent to open at 5.39 ringgit ($1.69) on its first day of trade in Kuala Lumpur, up from the institutional price of 4.55 ringgit in the flotation. It closed at 5.30 ringgit.
The IPO raised 10.4 billion ringgit ($3.25 billion), said the firm, which is the world's third-largest palm oil company by land area.
"We are very excited because the successful completion of this IPO heralds (Felda Global's) transformation" from an agriculture business to an expanding conglomerate, company chairman Mohamad Isa Abdul Samad said in a statement.
Despite the dark shadow that the eurozone debt crisis continues to cast over global financial markets, and the jitters sparked by Facebook's disastrous listing last month, analysts said Felda shares were well supported.
Ooi Chin Hock, a dealer with Malaysia's M & A Securities, said prices were "within expectation", holding up in a stock market which closed 0.48 percent lower Thursday. The day's high was 5.46 ringgit.
"It's still one of the darling counters," he told AFP.
Facebook raised $16 billion from its IPO but its shares have plummeted since its debut.
The volatile economic environment has also forced the delay of other major offerings across Asia including a planned $2.5 billion Formula One listing in Singapore.
But Ernst and Young said momentum of IPOs in Southeast Asia was driven by "resilient financial performance, the support of cornerstone investors, pension and other funds, and ample liquidity".
"The IPO pipeline remains relatively strong in Southeast Asia. There are still many regional players looking to tap the equity market to raise capital," it said in a release Wednesday.
Prime Minister Najib Razak, who must call a general election by next April, has thrown his weight behind the listing, promising it will benefit more than 112,000 settler families who own part of the plantation land.
He announced the listing plan in October as part of a wider push to divest state-run firms and increase foreign investment in the Southeast Asian country.
The company is an arm of the Federal Land Development Authority, a government agency that previously provided land to the rural poor.
Najib has announced each settler family will get a 15,000 ringgit cash payment from the listing.
But some settlers have opposed the listing due to concerns that the scheme may expose them to more risk and potentially rob them of their land. Felda Global has denied it.
Felda Global has said it will expand to Southeast Asian countries and Africa to grow oil palm, rubber and sugar cane and that demand for palm oil is good in China and India.
Funds raised from the listing will also be used to replant mature oil palms, among others.
But the industry as a whole is accused by campaigners of clearing plantations and threatening endangered species and tribes, especially on Borneo island which is shared between Malaysia, Indonesia and Brunei.
However, as a well-established producer Felda has not been a major target of environmentalists' criticism.
Felda Global is the biggest IPO in Malaysia since state oil firm Petronas' unit Petronas Chemicals Group Bhd. raised $4.14 billion in late 2010.
Analysts say the scheme will help Malaysia's $27 billion palm oil sector -- the world's second largest -- compete more efficiently with top producer Indonesia.
The price of palm oil has tripled in the last decade, and the industry is the fourth-largest contributor to the Malaysian economy.
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New loo turns poo into power
Singapore (SPX) Jun 28, 2012
Scientists from Nanyang Technological University (NTU) have invented a new toilet system that will turn human waste into electricity and fertilisers and also reduce the amount of water needed for flushing by up to 90 per cent compared to current toilet systems in Singapore. Dubbed the No-Mix Vacuum Toilet, it has two chambers that separate the liquid and solid wastes. Using vacuum suction ... read more
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