Subscribers to newly listed animal health solutions provider Rhone Ma Holdings Bhd must have been ecstatic over the 16 per cent gain at its debut on the main market of Bursa Malaysia last week following an abject year for flotation exercises and the equities market in general.
For two consecutive years, Malaysia's benchmark FBMKLCI has finished in negative territory and with only a few days to the year's end, it looks likely to make it a hattrick this year.
Over the 2014-2016 period, corporate earnings growth has been underwhelming, akin to an "earnings recession", observed MIDF Research.
The weaker corporate performance has not helped market sentiment, which in turn has put off potential candidates from going public.
To be fair, the dearth of IPOs has been widespread in a number of markets including Singapore.
Ten companies have listed this year - fairly equally divided between the Main and Ace markets; semiconductor manufacturer Foundpac Group is scheduled to bring up the rear this week when it makes its debut.
Foundpac's RM22 million (S$7.1 million) flotation exercise is the smallest this year but the largest, amounting to RM129 million by leather car seat cover manufacturer Pecca Group, was not terribly large either.
In all, the 11 IPOs - which matched last year's - will raise just under RM600 million or a paltry US$134 million.
At the same time, heftier companies were taken private, the most notable being planter Kulim, which parent state-owned Johor Corporation forked out RM2.2 billion to buy over and delist.
Public Investment Bank research head Ching Weng Jin attributed the lack of big-ticket IPOs this year to "liquidity drying up" on the back of capital flows back to the United States in anticipation of higher yields.
Poor sentiment stemming from the global fallout from development fund 1MDB's financial scandals and perceived state inaction over the malfeasance also rocked investor confidence.
As the blowback is far from over, 2017 could still prove daunting for prospective issuers, especially as macro conditions appear unexciting.
External headwinds present the key risk for export-dependent Malaysia, according to Alliance Research analyst Bernard Ching, especially if there is a severe downturn in global trade.
"The macro outlook looks unflattering," he cautioned.
Nonetheless a number of companies have already sounded their interest to go public.
The larger ones, according to Public's Mr Ching, include port operator MMC (RM750 million), QSR Brands (franchise holder of KFC and Pizza Hut), EcoWorld International (RM500 million), Iskandar Waterfront and Edra Global Energy.
Having deferred its listing this year, private developer EcoWorld intends to go ahead in 2017 as it needs funds for its overseas projects.
Flotation exercises by independent power company Edra Energy and developer Iskandar Waterfront will be closely watched given their Chinese shareholding and/or linkages to the tainted 1MDB.
In the past the Malaysian bourse has attracted a number of smaller Chinese listings but they have shied away in recent years.
In any event, the feeling appears mutual as almost every red chip - if not all - has left retail investors with buyer's remorse.
XingQuan International Sports Holdings Ltd is but one example.
For the fourth quarter to end June, the sports shoes manufacturer announced a loss of RM387 million.
It was its worst quarterly loss but what astonished was that a spectacular RM252 million of the loss stemmed from a client's rejection of its custom-made shoes for not adhering to specifications.
Given the pent-up demand for good IPOs, retail investors have little chance of successfully subscribing to small issues such as Rhone Ma's, which raised RM32 million, given that only a tiny portion is allocated to the public.
State-owned entities tend to offer the public a fairer chance of participation.
Take 2012, which remains the record year for IPOs as about RM24 billion was raised with the bulk coming from Integrated Healthcare Holdings (IHH) and Felda Global Ventures Holdings.
IHH raised about RM6 billion and Felda Global RM10 billion as the administration took the companies to market ahead of the 13th general election in 2013 in a bid to raise funds, boost market sentiment and increase the value of the equities market.
But not all GLCs (government-linked companies) are run equally.
While IHH has gained about 126 per cent since its listing, Felda Global - it was the second-largest IPO that year after Facebook - has seen two-thirds of its value wiped out.
Although it has been another bleak year for IPOs, only two are trading below their reference price while many of the others are yielding double-digit returns.
Engineering firm HSS Engineers was a disappointment and has lost 17 per cent of its worth.
On the flip side, process control equipment and measurement instruments distributor Dancomech Holdings, which raised RM30 million, has gained an impressive 91 per cent over its RM0.75 offer price while convenience store operator Bison Consolidated, which raised three times as much, has seen a 60 per cent rise in its share price.
This article was first published on December 27, 2016.
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