On 11 May 2012, Bank Islam was chosen as underwriter for Pestech IPO on reasons that it is a Syariah-compliant bank which would give confidence to Bumiputera investors.
Even though Bank Islam is relatively small, having a Syariah-compliant bank as underwriter means they are in hope to attract investment interests from the prime pilgrim funds Lembaga Tabung Haji and Malaysian Armed Forces Fund Board (LTAT).
Subscribing to a substantial amount of shares, the funds are usually cornerstone investors in the IPO they are interested in. Having well-known names as cornerstone investors in any IPO is important to attract retail investor as they are better able to support the stock with their strong holding power.
Apart from their supportive role, the funds are active traders in the Malaysia’s stock exchange and they have the ability to drive momentum and direction of the market. This is especially important if you are planning to flip from first-day gains.
Other prominent Government linked institutional funds that include Employees’ Provident Funds (EPF), Kumpulan Wang Persaraan (KWAP) and Skim Amanah Saham Bumiputera