March 25, 2023

DealBook: Felda Shares Soar 20% on the Heels of $3.1 Billion I.P.O.

Farmers harvesting oil palm fruit. Felda Global Ventures of Malaysia is a major producer of palm oil.Samsul Said/ReutersFarmers harvesting oil palm fruit. Felda Global Ventures of Malaysia is a major producer of palm oil.

HONG KONG — Shares in Felda Global Ventures rose as much as 20 percent in their trading debut in Kuala Lumpur, Malaysia, on Thursday following the palm oil producer’s successful $3.1 billion initial public offering earlier this month.

Shares in Felda, which was privatized by the Malaysian government in the world’s second biggest I.P.O. of the year behind that of Facebook, rose as high as 5.46 Malaysian ringgit, or $1.71, apiece in morning trading.

The opening day pop briefly increased Felda’s market value by an additional $1 billion, before the shares gave up some of their gains to settle at 5.30 ringgit apiece at the close of trading on Thursday, 16 percent above the I.P.O. offering price of 4.55 ringgit.

Felda’s is a rare success story in Asian markets, which continue to struggle with weak trading volumes and lackluster demand for new offerings because of investor worries about Europe’s debt crisis and a lingering economic slowdown in China.

Recent weeks have seen a series of large I.P.O.’s in Asia and elsewhere withdrawn or postponed because of slumping markets. Those included a planned $3 billion offering by the Formula One racing outfit in Singapore and a $1 billion Hong Kong share sale by Britain’s Graff Diamonds.

Still, several smaller deals have managed to get through. Earlier this week, China Nonferrous Mining successfully priced its $247 million Hong Kong share sale, while in Indonesia, the media company PT MNC Sky Vision priced its $226 million deal, according to the term sheets for both offerings.

Felda, which draws about 80 percent of its revenue from sales of crude palm oil within Malaysia, sold 1.92 billion shares to institutional investors at the offer price and 273 million shares to retail investors at a 2 percent discount, according to its prospectus.

Of the total I.P.O. proceeds of 9.93 billion ringgit, about 55 percent went to the government, which sold a 33 percent stake, and about 45 percent went to the company, mainly for the purchase of new plantations. Felda already has about 880,000 acres of palm plantations in Malaysia, according to its Web site.

CIMB, Maybank and Morgan Stanley were the joint bookrunners for the I.P.O., while the three banks, in addition to Deutsche Bank and JPMorgan Chase, underwrote the retail offering.

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DealBook: Hong Kong’s Chow Tai Fook Jewellery Plans $3 Billion I.P.O.

4:19 p.m. | Updated

HONG KONG — Despite the growing nervousness in the global financial markets, a large jewelry company based in Hong Kong is set to stage one of the largest initial public offerings this year, with a listing that could raise as much as $3 billion or more next month.

Chow Tai Fook Jewellery is offering 1.05 billion shares at 15 Hong Kong dollars to 21 Hong Kong dollars each, a person with direct knowledge of the transaction said on Friday.

At the upper end of that range, the proceeds would total 21.05 billion Hong Kong dollars, or $2.7 billion — an amount that could still rise by as much as 15 percent, to about $3.25 billion, if solid demand allows the company to sell more shares, according to this person, who spoke on condition of anonymity because the details were not yet public.

This would make the listing the biggest so far in Hong Kong this year, and one of the largest in the world so far this year. Nervousness over the escalating debt crisis in Europe and feeble growth in the United States has undermined investor sentiment this year and caused new-issue volumes to slump.

Although little known in the West, the family-owned Chow Tai Fook is a giant in the jewelry business.

It has more than 1,500 outlets, nearly all in Hong Kong, mainland China, Taiwan and the former Portuguese colony of Macao, and far outstrips rivals like Cartier and Tiffany’s, which, like many other Western luxury companies, have been racing to step up their presence in the rapidly growing Chinese market in recent years.

Asia’s rising share in consumer and luxury spending is also prompting Western companies to seek stock market listings in the region.

The Italian luxury retailer Prada listed in Hong Kong earlier this year, and Graff Diamonds, a jeweler based in London, is considering listing in Hong Kong next year, top executives from the company said last week.

The road show for Chow Tai Fook’s listing is set to start on Monday, with a trading start in December. Chow Tai Fook declined to comment on Friday.

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