CapitaMalls Asia IPO & first day of trading (25/11/09)

CapitaMalls Asia IPO has ended & it's reported that its public offer of 95 million offering shares at $2.12 per share was 4.9 times subscribed. No, I did not subscribe to CapitaMalls Asia IPO.

I managed to get my hand on its printed prospectus from one of its shopping center, though (good effort of setting up a booth & distribute the print out). But what rather turns me off is the fact that the prospectus is very thick.

Sure, it makes a very nice reading with all those figures & colours. Yet, to think they wasted so much money to print all those booklets? No so environmentally friendly, huh, CapitaMalls Asia?

With that thinkin (frivolous, perhaps, for some), I decided not to be part of the rapists of the Earth (may you rest in peace, trees who were destined to be transformed as CapitaMalls Asia IPO prospectus).

Property developer CapitaLand's latest unit to list, CapitaMalls Asia, has attracted strong interest for its initial public offering.

CapitaLand said on Tuesday in a statement to SGX that its public offer of 95 million offering shares at $2.12 per share was 4.9 times subscribed.

It raised $988.5 million from 44,507 valid applications at the close of the public offer at noon on Monday and will begin trading on Wednesday.

All of its 11.6 million reserved shares were applied for by the directors, management, employees and business associates of the CapitaLand Group, including CapitaMalls Asia and its units.

About $24.7 million was received for the reserved shares, the firm said.

Upon completion of the IPO and assuming the full exercise of the over-allotment option, CapitaLand's shareholding interest in CapitaMalls Asia will be reduced from 100 per cent to 65.5 per cent, and the IPO would have raised approximately S$2.8 billion, said the firm.

From Straits Times, "CapitaMalls raise $2.8b in IPO".

Property group CapitaLand said that it raised $2.8 billion by selling 34.5 per cent of its retail arm CapitaMalls Asia (CMA) in its initial public offering (IPO).

Both the placement and retail shares were oversubscribed, and the company also released all over-allotment shares. In total, 1.34 billion shares were sold at $2.12 apiece.

The listing of CMA - which has a $20.3 billion portfolio of 86 malls in Singapore, China, Malaysia, Japan and India - is Singapore's biggest IPO since Singapore Telecommunications raised more than $4 billion in 1993.

Analysts expect CMA shares to gain today on their debut, fuelled by demand from institutional investors keen to gain exposure to China's fast-growing consumer market. More than half of CMA's malls are in China.

In a note, DMG & Partners analysts Brandon Lee and Jonathan Ng gave a valuation range of $2.42- $3.01 for CMA's shares. This is between 14 and 42 per cent above the IPO price of $2.12.

CapitaLand had earlier set an indicative range of $1.98 to $2.39 for the IPO, but later decided to price it below the mid-point of the range - a move that analysts said was to ensure that the stock trades well after it debuts.

CapitaLand yesterday reported demand of about 2.5 times for the placement tranche of 1.059 billion shares. An additional 174.8 million shares were over-allotted due to strong demand from investors.

Also, the public offer (excluding reserved shares) of 95 million shares was 4.9 times subscribed. In addition, all of the 11.7 million shares reserved for the directors, management, employees and business associates of the group were also taken up.

'Upon completion of the IPO and assuming the full exercise of the over-allotment option, CapitaLand's shareholding interest in CapitaMalls Asia will be reduced from 100 per cent to 65.5 per cent, and the IPO would have raised approximately $2.8 billion,' CapitaLand said.

CMA chief executive Lim Beng Chee said that the company is well-positioned to ride on strong consumerism trends in Asia and will continue to grow its business in the region, with an initial focus on China and Singapore.

CMA marks the sixth entity within the CapitaLand group to be listed on the Singapore Exchange. CapitaLand has previously said that it could record a one-time gain of $883 million from this IPO.

Part of the proceeds will be paid out as a special dividend to the group's shareholders. The company will also use some of its proceeds to invest in its residential and service residence business units. In particular, CapitaLand is looking at Singapore, China, Australia and Vietnam for growth for the overall group.

CapitaLand's shares lost four cents to close at $4.11 yesterday.

From Business Times, "CapitaLand raises $2.8b from CapitaMalls Asia IPO".

Update on 25/11: CapitaMalls Asia performed wonderful in its first day of trading. The counter is closed at $2.30 (compare to its IPO price of $2.12).

CAPITAMALLS Asia shares rose more than 8 per cent on their Singapore debut on Wednesday before trimming gains, as investors bought into Singapore's biggest public offering for 16 years to gain exposure to China's fast-growing consumer market.

At 0130 GMT (9.30am Singapore time), CapitaMalls was traded at $2.25, or 6.1 per cent higher than its initial public offering price of $2.12 a share, after slipping from opening at $2.30. Analysts had expected it to gain about 10 per cent from its IPO price.

'We have always endeavoured to price our transaction to leave something behind for our stakeholders,' said CapitaLand CEO Liew Mun Leong at a ceremony to mark the debut of the Singapore developer's shopping mall unit.

Its IPO was 2.7 times subscribed with strong institutional demand from Europe and the United States, said parent company CapitaLand, which will retain about 65 per cent of CapitaMalls and plans to use the IPO proceeds to fund its expansion in Vietnam and grow its Ascott serviced residences business.

Analysts say CapitaMalls, which owns or manages 86 shopping malls including 50 in China, offered a way to tap the region's growing consumer demand, especially in China where retail sales rose 16.2 per cent in October from a year ago.

The sale of CapitaMalls shares, at 1.55 times book value compared with parent CapitaLand's 1.4 times, may spark a trend of firms floating minority stakes in their most attractive subsidiaries to 'unlock' the value of the assets.

From Straits Times, "CapitaMalls gains on debut".

Update on 26/11: The counter closed at $2.30 (that is up 8.5 per cent over its IPO price) is deemed to be against expectations for a 10 per cent jump. For the record, its second day trading also closed flat at $2.30.

Shares of CapitaMalls Asia made their much-anticipated debut on the Singapore Exchange on Wednesday.

The counter closed at S$2.30 - up 8.5 per cent over its IPO price - against expectations for a 10 per cent jump.

The listing was the largest in Singapore in 16 years. The IPO was 1.7 times oversubscribed, with the institutional portion garnering about 2.5 bids for every available share.

Liew Mun Leong, chairman of CapitaMalls Asia, said: "We have received very strong response from the local retail investors and international institutional investors, of which more than 65% are from US and Europe.

"They believe in the future of Asia's growing economies, particularly in the domestic and consumer spending sectors."

CapitaMalls Asia owns or manages 86 shopping malls across five countries in the region.

CapitaMalls Asia shares had begun with what appeared to be a rousing start, rising 8.5 per cent over its IPO price to S$2.30. But the initial excitement fizzled somewhat, as the counter dropped to an intra-day low of S$2.23 at midday.

The bulls then returned after the lunch break, sending the stock to an intra-day high of S$2.31 before settling at its opening price of S$2.30.

The performance fell short of analysts' expectations. Roger Tan, vice-president of SIAS Research, said: "At this point of time, I think investors are a bit cautious because it's the end of the year. And so far volatility in the US markets and in China and in Asia has been pretty high.

"So I guess investors would prefer to keep a little bit of whatever returns that they've made over the year in cash, hoping to see whether... we can come back in January to ride another bull run."

Analysts said CapitaMalls Asia's large issue size could have weighed against the IPO. It had offered 1.16 billion shares in its IPO, while another 175 million shares were issued under an over-allotment option. All in, the IPO raised S$2.8 billion.

There was much anticipation surrounding CapitaMalls Asia, especially after the debut of China-based canned food maker Sino Grandness earlier this week, where the counter shot up 52 per cent on its first trading day.

But some analysts still believe that shares of CapitaMalls Asia could hit S$3.00 in a year.

From Channel NewsAsia, "CapitaMalls Asia ends trading debut at S$2.30, up 8.5% on IPO price".


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