Retail tranche of CapitaMalls Asia IPO over-subscribed by 3.9 times
By Ryan Huang, Channel NewsAsia | Posted: 24 November 2009 2210 hrs

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SINGAPORE : The IPO by CapitaMalls Asia saw strong demand, with the retail tranche over-subscribed by 3.9 times, and the institutional tranche over-subscribed by 1.5 times.

At S$2.8 billion, the IPO is Singapore's largest in 16 years.

CapitaMalls Asia will make its debut on the Singapore Exchange on Wednesday.

And if the IPO subscription rates are anything to go by, it looks set to make a splash.

Market watchers are predicting that the counter will rise by 10 per cent from its offer price of S$2.12, which is about 1.55 times book value. They said the valuations are relatively good, and interest has been reflected by the strong demand.

Philip Lee, CEO of Investment Banking (Southeast Asia), JP Morgan, said: "If you look at what CapitaMalls Asia is all about, it's really about Asian consumerism.

"It's about China, which is very exciting to a lot of investors, and this particular offering provided that opportunity to investors, which is why we got strong support from both local and international investors."

CapitaLand is raising some S$2.8 billion by selling some 1.2 billion shares in its Asian shopping malls unit.

JP Morgan, its financial adviser, said the timing of the launch is almost perfect.

"There's such a large amount of liquidity out there, with funds wanting to invest in Asia. If you talk to fund managers and ask where they would put their investible dollar this year, they'll tell you it's Asia," said Lee.

CapitaMalls Asia manages over 80 properties in nearly 50 cities across the region, including those in Singapore, China, Malaysia, Japan and India. - CNA /ls