Shares in Malaysia’s Sunway Construction Group rose as much as 10 percent on their market debut, even after being priced at the top of an indicative range, with investors betting the firm is poised to win business as the government invests heavily to upgrade the country’s transport infrastructure.
After raising 478.4 million ringgit ($125 million) in Malaysia’s second-biggest listing so far this year, Sunway Construction saw its shares jump to 1.24 ringgit by 0153 GMT. That was off a mid-morning high of 1.32 ringgit, but still well the debut price of 1.20 ringgit.
Sunway Construction will distribute listing proceeds to shareholders in its parent, conglomerate Sunway Bhd. With an order book of 2.76 billion ringgit as of March 31, the firm doesn’t operate in the residential property construction business, weakened by a slowdown in consumer demand.
“The prospects in construction is robust right now with rail infrastructure projects…and so on,” Kenanga Research analyst Iqbal Zainal said.
The initial public offering in Sunway Construction was second in value this year behind the 2.74 billion ringgit IPO of Malaysia’s largest independent power firm, Malakoff Corporation Bhd, in May.
Malakoff shares are now trading 7.8 percent below their listing price, while the Kuala Lumpur exchange’s benchmark index has fallen 6.9 percent over the same period.
Maybank Investment Bank and RHB Investment Bank were global coordinators of the Sunway Construction IPO. The two banks and HSBC were joint bookrunners. ($1 = 3.8135 ringgit)