INVESTORS of initial public offerings (IPOs) that are slated for listing over the next one month or two must brace themselves for the ‘ungodly timing’ that coincides with bearish market sentiment stemming from inflationary pressure of global scale as well as unsettled geopolitical concerns from the Russia-Ukraine dispute.
In essence, they must be able to endure short-term pain in order to reap long-term gains as per the sharing by building material wholesaler Unitrade Industries Bhd’s managing director Nomis Sim Siang Leng whose company made a lukewarm debut on the ACE Market of Bursa Malaysia yesterday (June 14).
“To be honest, this is not the best time for a listing, considering the global market from last Friday until today (June 14). Wall Street has impacted the entire world overnight, not just our counter, and these things are out of our control,” he was cited as saying by theedgemarkets.com at a virtual media conference soon after Unitrade’s listing.
“However, in the long term, we strongly believe that our fundamentals are strong and we will continue to grow irrespective of today’s share price.”
Unitrade, which ended its maiden day’s trading down 2 sen or 6.25% from to 30 sen from its IPO price of 32 sen, is down by a further 1.5 sen or 5% to 28.5 sen at the close of today’s mid-day trading with 52.59 million shares traded, thus giving the counter a market cap of RM445 mil.
Interestingly, on the same day as Unitrade’s listing, another ACE Market-bound counter SNS Network Technology Bhd inked an underwriting agreement with M&A Securities Sdn Bhd in conjunction with the company’s IPO exercise (tentative listing date: September 2022).
Under the deal, M&A Securities will underwrite 129 million new shares of the public issue of 362.9 million new shares that represent 22.5% of the enlarged share capital of the ICT products and components trader.
The IPO also involves an offer for sale of 48.4 million existing shares to selected investors by way of private placement.
And today, instant beverage premix manufacturer Orgabio Holdings Bhd, another counter en route for listing on the ACE Market, said it expects to raise RM29.97 mil under its IPO exercise.
Tentatively slated for listing on July 5, the company plans to utilise RM16 mil (53.4%) raised from its IPO to part finance the construction of its new factory in Semenyih (Selangor) as it expands its manufacturing capacity to cater for its future business growth.
Orgabio has attracted and secured traditional healthcare group Hai-O Enterprise Bhd (a wholly-owned subsidiary of Main Market-listed BesHom Holdings Bhd) as its cornerstone investor.
Next in line to test the turbulent waters is one-stop integrated engineering and automation solutions provider, SFP Tech Holdings Bhd (ACE Market; IPO price: 30 sen), which will debut on June 20, followed by jewellery wholesaler and manufacturer YX Precious Metals Bhd (ACE Market; IPO price: 28 sen) on June 23, and rubber processor Seng Fong Holdings Bhd (Main Market; IPO price; 75 sen) on July 7. – June 15, 2022
