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Petronas Chemical IPO Tops Southeast Asia Offerings for 2011


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Malaysia Looking to Attract Investors through Petronas Chemical IPO and other Opportunities

petronas chemical ipo

International investors are watching with interest after the announcement of the Petronas Chemical IPO in late October. The Malaysian national oil company division intends to offer 31 percent of its ownership shares in an initial public offering. Anonymous sources indicate estimates on share prices are approximately 5 ringgits, or $1.60, per share.

Reasons for Petronas Chemical IPO

In March 2011, the prime minister of Malaysia indicated a need for foreign investment in the Malaysian stock market. In order to drive stock sales, he called for increased participation among large companies on the country’s public exchange. Several companies have offered initial public stock options this year in response to the prime minister’s call for help. The Petronas Chemical IPO will be the second oil-based company to join the market.

Petronas will benefit from the share sales as well through increased capital and additional opportunities for the future. The company already trades on the Kuala Lumpur exchange under four other divisions. Petronas may decide to offer shares in additional divisions as early as next year.

Potential Buyers

There are already several large-scale buyers lined up for the Petronas Chemical IPO stocks. Initial information provided to fund managers indicates two Malaysian retirement funds are positioned to purchase a large portion of the shares being offered. The funds plan to purchase over 400 million of the almost 2.5 billion shares being offered.

Impact on Malaysian Economy

Financial experts expect the Petronas Chemical IPO to be beneficial for investors and the economy. Successful launches of large companies on the exchange increase the likelihood of future IPOs by others. Stockbrokers in the country indicate the purchase of the Petronas Chemical IPO shares will increase Malaysian market capitalization and will be an investment opportunity they cannot ignore.

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