Recently, one of my readers asked me whether I would be interested in Felda Global. I replied that I am not interested as the dividend yields are low, below 4% which is lower than the other primary palm oil producers and that it has rather high political and execution risks. There seems to be a lot of excitement around this IPO, and for good reason as the $3.2 billion Felda IPO is probably going to be the world’s second largest IPO of this year. The IPO is several times oversubscribed and will probably be priced at the top end of the price range of RM 4 to RM 4.65 per share.
Currently, Felda is already the third largest palm oil producer in the world in terms of planted area, behind Sime Darby and Golden Agri Resources. However, the annual FFB yield is lower than most of the other ......