Why You Must Apply PETRONAS Chemicals Group Bhd Initial Public Offer | PCG IPO

PETRONAS Chemicals Group Berhad (PCG) is the Top integrated petrochemicals producer and one of the largest in the South East Asia.

This Initial Public Offer(IPO) will be the biggest in South East Asia for 2010 which expected to raise capital of  RM3.5 billion from its offering of 2.48 billion shares with retail shares offered at RM5.05.

It was reported that PCG also said it was studying the possibility of developing a world-scale, greenfield ammonia and urea production facility that would be supplied with natural gas feedstock available off the east coast of the peninsula.

PETRONASChemicals Why You Must Apply PETRONAS Chemicals Group Bhd  Initial Public Offer | PCG IPO

This IPO is must apply because PCG is backed by PETRONAS group, which also owns other 4 Public Listing Company units:
i) MISC Bhd
ii) Petronas Dagangan Bhd
iii) Petronas Gas Bhd
iv) KLCC Property Holdings Bhd

PCG can also leverage and have a very strong support from the parent company.

This stock will be a core holding stock for every fund manager as PCG would be a component of the Kuala Lumpur Composite Index (KLCI).

The listing of privately-held government-linked companies (GLCs), such as Petroliam Nasional Bhd’s (Petronas) units Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) and Petronas Chemicals Group Bhd (PCG), was a step taken by Malaysia Government to boost market liquidity and to attract many quality  Foreign Direct Investment(FDI).

PCG plans to distribute 50% of its net profit for each calendar year starting from year ending 31 March 2011.

I do expect it will be oversubscribed by looking at a trend that last week’s listing of Petronas’ other subsidiary, Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) which were oversubscribed 27.7 times for its institutional offering.

Applying for IPO is like gambling for two reasons.

First you cannot guarantee your application success when the issue oversubscribed via balloting.

Second, even  you successful get the IPO, the opening price may be lower than offer  price.

So manage your expectation correctly as not all IPO will make you money.

You may apply the IPO via filling out the form, ATM or Internet Banking.

You may also check  your IPO result at the Issuing House web site.

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Share Issue Number : 502

Share Name : PETRONAS Chemicals Group Berhad (PCG)

Issuing House : Malaysian Issuing House Sdn Bhd (MIH)

Unit Price : RM5.05

Minimum Unit : 100

Par Value (RM): 0.10

Board : Main Market

Sector : Industrial Products

Listing Schedule

  • Prospectus Date     01/11/2010
  • Opening of Applications     01/11/2010
  • Closing of Applications     09/11/2010
  • Tentative Balloting Date     12/11/2010
  • Tentative Allotment Date     24/11/2010
  • Tentative Listing Date     26/11/2010

Closing date is tentative and may subject to  change. Any changes to the above schedule will be announced in a widely circulated Bahasa Malaysia and English daily newspaper within Malaysia.

* The Final Retail Price will be determined after the Institutional Price is fixed on the Price Determination Date, tentatively on 12 November 2010 and will be the lower of the Retail Price of RM5.05 per Share and 97% of the Institutional Price, subject to a refund in the event that the Final Retail Price is lower than the Retail Price of RM5.05 per Share.

From the 1.78 billion existing shares offered under the IPO, 1.48 billion shares are for Malaysian and foreign institutional investors as well as bumiputra investors, while the retail offer of 293.02 million shares covers the Malaysian public, eligible directors of PCG and Petronas, eligible employees and customers. The 700 million new shares offered are for Malaysian and foreign institutional investors.

The principal adviser, managing underwriter and joint underwriter is CIMB Investment Bank Bhd. The joint global coordinators and joint bookrunners for the institutional offering are CIMB, Deutsche Bank AG, Hong Kong Branch, and Morgan Stanley & Co International plc.

The joint underwriters for the retail offering are Affin Investment Bank Bhd, HwangDBS Investment Bank, Alliance Investment Bank Bhd, KAF Investment Ban Bhd, OSK Investment Bank Bhd, AmInvestment Bank Bhd, Maybank Investment Bank Bhd, Public Investment Bank Bhd, ECM Libra Investment Bank Bhd, MIDF Amanah Investment Bank Bhd, RHB Investment Bank Bhd, Hong Leong Investment Bank Bhd and MIMB Investment Bank Bhd.

2 Responses to “Why You Must Apply PETRONAS Chemicals Group Bhd Initial Public Offer | PCG IPO”

  1. Government Optimistic On Petronas Chemicals Group’s Growth Prospects, Says Najib

    KUALA LUMPUR, Nov 2 (Bernama) — The government is optimistic about Petronas Chemicals Group Bhd’s growth prospects, both in expanding into more complex petrochemical products and supporting upstream and downstream industries, said Prime Minister Datuk Seri Najib Tun Razak.

    “We have great faith and high expectations that Petronas will contribute to drive innovative new development and reinforce Malaysia’s reputation as one of Southeast Asia’s premier petrochemicals production hubs,” he said.

    He said the listing of Petronas Chemicals Group, expected to be one of the largest ever undertaken in Southeast Asia, would contribute significantly to the expansion of Malaysia’s capital markets by increasing the liquidity needed to fuel economic growth.

    Upon successful listing, he said, it would comprise a significant portion of the FTSE Bursa Malaysia KL Composite Index.

    “By end of this year, the Petronas Group could collectively account for over 10 per cent of Bursa Malaysia’s total market capitalisation, and over 16 per cent of the FTSE Bursa Malaysia KL Composite Index,” he said when launching the group’s prospectus.

    The text of his speech was read out by his deputy Tan Sri Muhyiddin Yassin.

    The company’s initial public offering of up to 2.48 billion shares comprise an offer for sale of up to 1.78 billion existing shares and a public issue of 700 million shares to Malaysian and foreign institutional and selected investors at the institutional price.

    Najib said the oil and gas industry comprised over 10 per cent of the national gross domestic product, making it one of the main contributors to Malaysia’s prosperity.

    “Oil and gas are some of our nation’s most visible and valuable assets, which is why we have focused on this as one of the 12 National Key Economic Areas under the 10th Malaysia Plan,” he added.

    fr:bernama.com.my/bernama/v5/newsbusiness.php?id=540201

  2. Petronas Chemicals a ‘buy’ says OSK

    OSK Research has initiated coverage on Petronas Chemicals Group Bhd with a buy recommendation and target price of RM5.51.

    The target price was based on a 16 times price earnings ratio (PER) financial year 2012 earnings per share, it said in a research note here.

    OSK Research said the company deserved such valuations because of the strong support from the Petronas group, especially in terms of low feedstock’ prices and its attractive dividend payout ratio of 50 per cent.

    Petronas Chemicals, a leading integrated petrochemical producer in the South-East Asian region, is scheduled for listing on Bursa Malaysia on Nov 26.

    It has fixed the price of its initial public offering (IPO) at RM5.04 per share for the portion reserved for retail investors and at RM5.20 apiece for shares to be sold to institutional investors.

    Petronas Chemicals expects to raise gross proceeds of about RM3.5 billion from the exercise. The listing is to consolidate all of Petronas’ petrochemical activities into a single entity.
    The company has two core business segments, comprising olefins and polymers, and fertilisers and methanol.

    The olefins and polymers business dominates the group’s product mix contributing 70 to 75 per cent of its revenue while the balance is mainly contributed by the fertilisers and methanol business.

    For the petrochemical industry, OSK Research expects the industry to remain under pressure as further capacity is forecast in the immediate term.

    However, it also sees a gradual recovery in the industry in terms of utilisation rates and margins starting from next year and peaking in 2015, it said.

    OSK Research said the recovery will be driven by the Asia Pacific markets, where growth rates are higher compared to developed markets due to the lower level of material substitution for petrochemicals.

    These petrochemicals are increasingly used to substitute basic materials like wood, glass, metals, paper and card in the packaging, automotive and construction industries as they offer higher performance at a lower cost, it said.

    fr: btimes.com.my/articles/20101115204545/Article/#ixzz15OvUfpTC

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