PETALING JAYA: Investor interest in the mega-listing of IOI Properties Bhd, which has total assets worth RM15bil, could spark a re-rating of the local property sector.
Based on 2012 figures, IOI Properties is the second-largest property developer after SP Setia Bhd, with an operating profit of RM506.3mil compared to the latter’s RM549.9mil.
Its demerger from parent IOI Corp Bhd had excited the property sector and had been deemed a catalyst for the sector due to its asset size and international exposure, said analysts, who are generally positive on its relisting.
One analyst told StarBiz that IOI Properties’ asset size was huge and that its relisting, slated for somewhere in September, would definitely provide a boost to other developers.
Property counters on the local bourse have been playing catch-up of late, with stocks such as Eastern & Oriental Bhd, Malaysian Resources Corp Bhd and YTL Land & Development Bhd rising 7.78%, 1.91% and 6.88%, respectively, to RM1.94, RM1.60 and RM1.01 yesterday.
Big-cap SP Setia closed unchanged at RM3.70, while UEM Land Bhd fell three sen to RM3.17.
Shares of IOI Corp, meanwhile, rose to a high of RM5.35 before being suspended at 11.02am. It was last done at RM5.33, or 4.1% higher than its opening price.
According to the company, the suspension was made in view of the pending release of an announcement relating to a material corporate exercise.
An analyst with PublicInvest Research, in the meantime, said IOI Properties’ demerger from IOI Corp was “timely” and a “win-win” for both IOI’s plantation and property businesses.
He expected the initial public offering to fetch good valuations, given its huge asset size and overseas exposure.
He said the robust investment activities in the Asian equities market and general positive outlook on the property market presented a good opportunity for the company to unlock the value of its assets worth RM15bil.
“The surge in IOI Corp’s share price reflects that investors are excited, as they would get some returns from this exercise,” he said.
A property analyst added that the sector was seeing renewed interest after the uncertainties surrounding the general election had been cleared. This, she said, was accelerated by the market’s positive sentiment and liquidity in the equities market after lagging behind other segments for the past one year.
While concurring that IOI Properties’ demerger from IOI Corp could possibly re-rate the property sector, she noted that the quantum would depend on its valuations.
She pointed out that it was too early to gauge the valuations, as details like its land bank and specific valuations of its assets were not available yet.
“Nonetheless, we understand that the company’s land exposure is strategic. Locally, it has strategic land in Puchong central, Putrajaya and Johor, while another half of its projects are overseas, notably in Singapore and China,” she said.