KUALA LUMPUR: Sime Darby Bhd has sealed its position as the world’s largest listed upstream oil palm group and the biggest stock traded on Bursa Malaysia in terms of market capitalisation of RM66bil on its re-listing yesterday.
The counter surpassed Malayan Banking Bhd ’s market cap of RM44.4bil and plantation giant IOI Corp Bhd 's RM40.6bil.
Closing at RM11 on a volume of 68.4 million shares, the largest component of the KL Composite Index added 23 points to the benchmark.
Sime Darby made its debut at RM11.20 and was traded between a low of RM10.70 and high of RM12.10. It recorded a RM2.10 premium over its re-listing reference price of RM8.90.
Tun Musa Hitam strikes the gong to mark the start of trading in Sime Darby shares. With him are the company’s board of directors
An analyst with a foreign brokerage said: “It was a good debut by Sime Darby at a 24% premium since none of the other listed plantation companies on Bursa Malaysia had achieved such high premium during the six-week suspension of the merged conglomerate.”
Shareholders of Sime Darby should be “satisfied” with the outcome of the re-listing exercise and can look forward to seeing the counter continue to ride on the current bullish crude palm oil (CPO) price, ranging from RM2,900 to RM3,000 a tonne.
Under the terms of the merger, each original Sime Darby share was to be swapped for 1.23 Synergy Drive Bhd share.
The analyst said that at the RM11.20 pre-suspension price per “old” share, each Synergy Drive share would have been worth RM9.10.
With the new closing price of RM11 yesterday, a shareholder of “old” Sime Darby shares has gained RM1.90 premium on each “new” Sime Darby (renamed from Synergy Drive) share.
The analyst added that Sime Darby was currently trading at around 26 times pro forma earnings, roughly in line with pure-play plantation firms like IOI Corp.
At the re-listing ceremony, chairman Tun Musa Hitam said: “Today (yesterday) is a crucial day. It is time for us to deliver.”
He told reporters that the first-day performance of the stock was reflective of investors’ strong confidence in the conglomerate that has diverse businesses.
“The share price was higher than what we had benchmarked. Whether the good performance can be sustained will depend on the market's judgment on Sime Darby’s current and future results,” Musa said.
As a conglomerate, “we are living for the future and what is important is to sustain our long-term value,” he said.
President and group chief executive Datuk Seri Ahmad Zubir Murshid said: “If the price manages to stay above RM12, Sime Darby’s market cap may touch RM70bil.”
On the outlook for CPO prices, he said: “I cannot predict the future but we will be happy if the price trades from RM2,500 to RM2,600 per tonne next year.
“As it is, I am happy that CPO currently is trading at RM3,000 per tonne.”
Zubir noted that the group’s CPO selling price as of November was about RM2,400 a tonne.