2Q Sees Global IPO Activity Rise
According to a study issued yesterday by Ernst & Young (E&Y), global initial public offering (IPO) activity picked up in the second quarter of 2012 on a quarter-on-quarter basis. From April to June, US$41.8 billion were raised worldwide through a total of 206 deals. Compared to the first quarter’s figures of US$17.4 billion raised in 196 deals, the number of deals was 5 percent up while capital raised was 2.4 times higher. However, on a year-on-year basis, this second quarter was 46 percent lower by number of deals and 36 percent lower by capital raised than in the previous corresponding period (US$65.6 billion in 383 deals). Leading sectors by capital raised in 2Q were consumer staples, financials and technology. Besides the hefty chunk of capital raised by social media company Facebook in May, there were two of the largest Asian new listings, namely Malaysian palm oil giant Felda Global Ventures Holdings and China brokerage Haitong Securities. Back at home, the Singapore Exchange has four listings on the Mainboard that raised US$349 million and two Catalist IPOs that raised US$17 million in the current quarter.
Significance: Geographically, US and Latin America accounted for 60 percent of the capital raised in 2Q. Meanwhile, the European IPO market suffered the most in the quarter as a result of difficult economic conditions, with IPO activity there falling 68 percent to US$915 million in 2Q from US$2.9 billion in 1Q. Asian markets accounted for 35 percent of 2Q IPO activity.
Shareholders Offered $0.135 Apiece In K1 Ventures’ Privatisation Plan
A voluntary conditional cash offer for shares of K1 Ventures was filed on 27 June with the Singapore Exchange. Valuing it at $292.4 million, the offer for the diversified investment firm made through GKB Holdings (GKB) translates to $0.135 a share. Citing low trading liquidity and compliance costs of maintaining listing, the offeror has the intention to delist K1 Ventures thereafter. K1 Ventures said that it will appoint an independent financial adviser to advise its directors on the offer. As at 27 June, GKB has received irrevocable undertakings from the majority shareholders to accept the offer for their joint stake of 62.36 percent in K1 Ventures. GKB’s offer is conditional upon receiving valid acceptances of not less than 90 percent of the voting rights based on the issued K1 Ventures’ shares at the close of the offer.
Significance: Priced at a 19.5 percent premium over K1 Ventures’ last transacted price of $0.113 on Monday, the offer provides an opportunity for minority shareholders to exit and realise the cash value of their shares.
Interra Sets Its Sights On New Oil And Gas Blocks In Myanmar
Upstream oil and gas player Interra Resources is looking to aggressively develop its two onshore oil fields in Myanmar and is eyeing new oil and gas blocks scheduled to come up for tender this year. Started out in Myanmar in 1996, the firm is among the few listed Myanmar-focused plays. 64.1% of Interra’s FY11 revenue of US$24.8 million came from Myanmar, seen as one of Asia’s last frontier markets. The balance was derived from Indonesia. “We are looking to significantly increase the oil production . . . We hope to increase it by 15-20 per cent per annum,” chief executive officer Marcel Tjia said. The company has a partnership with Chinese state-run firm ZhenHua Oil for its oil fields in Myanmar, and aims to drill a total of 10 wells in the country this year. Myanmar is expected to offer up to 18 onshore oil and gas blocks in a global tender to be launched later this year, opening up a potential flood of new investment into the country. Tjia said that Interra will “definitely” look at potential blocks, but expects intense competition, especially from small-to-medium sized Asian oil and gas firms.
Significance: Among the most heavily traded stocks in the Singapore market over the past few months, Interra’s shares have quadrupled so far this year, valuing it at $121 million based on yesterday’s closing price of $0.41. Head of OCBC Investment Research, Carmen Lee, noted that stocks with exposure to Myanmar are getting a lot of limelight but cautioned investors to exercise a little bit more discretion because some of the stock prices have gone up quite a fair bit and it is still early to have a proper assessment of how things might turn out.