Friday, July 12, 2013

Between Airasia X and Astro's IPO

This morning while I was listening to BFM, it was talking about Airasia X's IPO opening which needed Maybank to stabilize the price to prevent it from dropping below its initial offer price. The station mentioned of it being the worst performing IPO in recent times. I think that's not true. Probably if we take into account not so long ago last year, perhaps Astro was worse dropping below RM3 for a long long while.

The difference between Airasia X and Astro. Well, if you give me the choice, I would take Airasia X despite both businesses needed huge capital outlay. Airasia X is looking towards growth prospects although the challenges are aplenty while Astro is looking towards a more bleak outlook having gone through maturity stage years ago and now fighting older age. It is fighting against something which it cannot fight - not ABN or RTM - but the internet.

One of the reason why the investment community are not favorable towards both IPOs are due to the pricing. They are just pushing the envelope. If you noticed, the more recent large IPOs are just too expensive for investors and the launching price just do not makes sense. IHH, FGV included but of course these two have big brother to support and make them look good but Airasia X (which remain to be seen as it is just 2 days) and Astro do not have that big brother.

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