‘It’s not the right time to make a debut, no matter how much you fall victim to the situation.’
The first appearance of Unitrade Industries Bhd, a building materials wholesaler, on Bursa Malaysia today was a little disappointing as its shares fell 26.5 sen (17.19%) from the initial public offering (IPO) price of 32 sen.
It is in line with the bearish market conditions that hit Wall Street all the way to the local region, as readings of US inflation data published high last week have strengthened investors ’expectations of policy tightening by the central bank.
During the morning session, Unitrade shares started at 25 sen with 40.93 million shares traded, before it rose to 28.5 sen with a trading volume of 141.64 million by 11am, making it the most active stock.
It is understood that Unitrade's IPO involved a public issue of 312.5 million new shares representing 20% of its share capital, and a sale offer of 125 million existing shares.
According to filings on Bursa, 78.1 million shares are available to the public, 63.5 million shares for directors as well as employees and individuals in companies, 117.2 million reserved for bumiputeras supported by the Ministry of International Trade and Industry, and the remaining 53.7 million for private placement.
The IPO will generate RM100 million, of which RM50.5 million will be used as working capital, while RM39.8 million for repayment purposes, RM5 million for pipe fabrication construction capital expenditure, and the remaining RM4.7 million is earmarked for listing expenses.
Commenting on Unitrade's rather disappointing first appearance, its Managing Director Nomis Sim Siang Leng said a strong business foundation would help the company's expansion regardless of share price performance.
He explained that it was a difficult time and less suitable for listing but looking at the long -term prospects, the company is believed to continue to grow.
