Reuters

(Wall Street Journal) - Strong demand for Felda's shares pre-IPO is no guarantee the listing will be considered a success. Investors should steer clear.

The world's second-largest initial public offering this year is about to get off the ground. Just don't mention the F-word—Facebook, FB +3.74% that is.

The Malaysia listing of state-run palm oil producer Felda Global will be the biggest IPO since Facebook's $16 billion equity offering. Like the social networking site, Felda is selling its shares toward the top end of the range. The company priced the deal Wednesday and could raise $3.13 billion by selling 2.19 billion shares in a listing at the end of this month.

Also like Facebook, Felda has drawn keen interest from institutional investors. Cornerstone investors such as Qatar Investment Authority and Hong Kong insurance company AIA Group 1299.HK +0.58% have pledged a collective $1 billion toward the IPO. (Cornerstones get a pre-alloted portion of the listed shares in return for promising to stick around for at least six months after the IPO.) Demand from other institutional investors is said to have been 30 times greater than the number of shares available to them.

Of course, there is nothing like the hype that accompanied the Facebook listing—whose shares are now about 28% below the IPO price. But there are nevertheless reasons not to follow the herd into Felda.

Read more at: http://online.wsj.com/article/SB10001424052702303410404577464420220369592.html