Injecting life into new listings
Cheah Chor Sooi | 09 Mar 2018 00:30
Wegmans Holdings’ listing ceremony on March 6 was attended by (from left) director Maziah Md Yamin, executive director Collin Law Kok Lim, managing director Keh Wee Kiet, chairman Chan Wan Seong and director Chan Foong Ping

MANY newly-listed companies have made lukewarm debuts on Bursa Malaysia as their initial public offering (IPO) prices are deemed unattractive to investors.

There is little premium for investors given that the IPO pricing is being fixed close to market price.

Mark-to-market is an accounting method that records the value of an asset according to its current market price.

Such a negative development is made worse by the current volatile market environment that provides a shot of uncertainty.

Investors may also not be keen to park their money in new listings, given the negative market sentiments.

Recent global events such as possible trade wars between major economies have shaken the confidence of both institutional and retail investors.

Generally, the price of IPOs is derived from their respective valuations which are not limited to the price-to-earnings ratio of companies, according to JF Apex Securities Research senior analyst Lee Cherng Wee.