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* Raised $1.5 bln in third-biggest Malaysia IPO this year
* Analysts expected shares to gain at least 6 pct in debut session
* Malaysia IPO market seen cooling in second half of 2013
By Yantoultra Ngui and Al-Zaquan Amer Hamzah
KUALA LUMPUR, Oct 19 (Reuters) - Pay-TV firm Astro Malaysia Holdings Bhd closed flat in a weak market debut Friday on concerns its valuation was too high, underperforming other recent big listings as Kuala Lumpur's booming IPO market looked set to lose steam next year.
Malaysia has defied the market gloom that has seen the value of new listings drop by more than half in the Asia-Pacific excluding Japan this year, becoming the top IPO destination in the region on the back of several government privatisations and a strengthening economy.
But after such a robust 2012, and with Astro's $1.5 billion sale marking the last major listing until the first quarter of next year, the market is expected to cool off.
"For Malaysia, we will see some setback because all the bigger ones have been listed this year," said Kaladher Govindan, head of research at TA Securities.
"Most of them are somehow government-linked companies. So you don't have bigger private entities getting listed. It may run out of steam in the second half of next year."
Astro shares rose as much as 3.7 percent before erasing gains to close at 3.00 ringgit, unchanged from the offer price in Malaysia's third-biggest IPO this year. Analysts polled by Reuters had expected a rise of at least 6 percent.
The IPO by Astro, controlled by Malaysia's second-richest man Ananda Krishnan, followed Felda Global Ventures Holdings Bhd's $3.3 billion offering in June and IHH Healthcare Bhd's $2.1 billion flotation in July.
By comparison, Felda, a palm oil firm, rose 16.5 percent higher on its first trading day. Hospital operator IHH had gained 10.5 percent on its debut.
"When compared to Felda and IHH, they are big government-linked companies, and investors are more confident in government-backed firms," said Choo Swee Kee, who oversees some 700 million ringgit worth of assets as chief investment officer at Kuala Lumpur-based TA Investment Management Bhd.
"On the other hand, Astro is more of a privately owned company, that explains its weaker share price performance on its debut today."
Astro, which also counts state investor Khazanah Nasional Bhd as a major shareholder, returned to public markets after it was taken private in 2010.
Friday's closing price gives Astro a market value of 15.6 billion ringgit ($5.1 billion), nearly double the 8.3 billion ringgit it was worth when it was taken private.
The price of 3.00 ringgit would translate to a price-to-earnings ratio of 32 times based on estimated earnings per share in fiscal 2013, TA Securities said.
"There were a lot of concerns earlier that the IPO was priced at a hefty price tag, in terms of price-to-earnings ratio," TA Securities' Kaladher said of Astro's share price performance on Friday.
Still, Astro has a near-monopoly in Malaysia's residential pay-TV market with a subscriber base of 3.1 million, which some analysts said would support the share price in the longer term.
"While its IPO valuation may not appear cheap initially, there is upside potential given the existing low pay-TV penetration of 46 percent," Kong Heng Siong and Chan Jit Hoong, analysts at OSK Research in Kuala Lumpur, wrote in a recent report.
Astro will also likely see an increase in average revenue per user as subscribers migrate to high definition TV platforms, while high entry barriers to the industry due to capital expenditure requirements would limit competition, they added.
In its IPO, Astro sold shares at the top end of a marketing range, bolstered by strong demand from cornerstone investors such as U.S. hedge fund Och-Ziff Capital Management and Standard Pacific Capital. The institutional portion of the IPO, or 20.8 percent of the total, was more than 30 times oversubscribed.
The flurry of deals has more than quadrupled Malaysia's 2012 IPO tally to about $7.5 billion, accounting for nearly one-quarter of all new listings in the Asia-Pacific excluding Japan this year. That compares with Hong Kong's $1.83 billion and Singapore's $3.97 billion so far this year, Thomson Reuters data shows.
In Singapore on Friday, units of Religare Health Trust , which owns hospital-related assets, plunged as much as 10 percent below the initial offering price of S$0.90 in their market debut. The trust, whose assets are managed by Indian hospital group Fortis, raised $416 million through an IPO.
Malaysia's next major listing will be the planned $1 billion offering for independent power producer Malakoff, 51 percent-owned by MMC Corp Bhd, in the first quarter of next year.
Westports Malaysia Sdn Bhd, operator of the country's busiest port, is looking to raise as much as $500 million in an IPO in the second quarter of 2013.
The founders of Malaysia's AirAsia Bhd, Tony Fernandes and Kamarudin Meranun, are also set to kick off an IPO spree in 2013 with three listings worth more than $500 million.
Astro's IPO was being handled by CIMB Group Holdings Bhd , Malayan Banking Bhd and RHB Capital Bhd . Several foreign banks were also advisers, including UBS AG, Credit Suisse Group AG, Goldman Sachs Group Inc and JPMorgan Chase & Co.