Capital markets executive summary | Thu 8 Jun 2023

Capital markets executive summary | Thu 8 Jun 2023

Edelteq soars 204.17% on listing

The ACE Market listed company opened at 75 sen or 51 sen (212.5%) above the initial public offering (IPO) price of 24 sen. The counter finally closed at 73 sen with 104.52m shares changing hands. It was the 3rd most active counter. The company’s closing premium is the 3rd highest after Oppstar (+285.71%) and TT Vision (+276.47%). The IPO price is based on a price-earnings multiple of 23.53 times and earnings per share of 1.02 sen in 2022. The IPO comprised the issuance of 100m new shares (18.8% of its enlarged shares) and an offer for sale of 43.2m existing shares (8.1%) via private placement. The listing was delayed from 30 May due to a dispute between the CEO and his former employers. Edelteq provides engineering support for integrated circuit (IC) assembly and test processes in the semiconductor industry. It also trades operating supplies, spare parts and tools for IC assembly and testing. 62% of revenue is from the design, development and assembly of automated test equipment and factory automation, 22.1% from design and assembly of IC burn-in boards and the supply of printed circuit boards, and 14.9% from the supply and refurbishment of IC assembly and test consumables. The local market contributed 77.6% of revenue. The company plans to penetrate the European market while expanding in the Philippines.

DNeX launches cloud-based financial and accounting SaaS

Dagang Nexchange’s subsidiary – Innovation Associates Consulting Sdn Bhd – kicked off the enterprise resource planning app called Government Agencies Digital System (EGADS). It is an accrual-based accounting system which offers accountability and transparency in the management of public resources. The app is built on the SAP cloud platform and complies with the Standard Accounting for Government Agencies (SAGA), the Self-Assessment SAGA Compliance (SASAR) and the Malaysian Public Sector Accounting Standard (MPSAS). The company plans to expand its system integration capability in transforming the government’s legacy system from cash to accrual accounting. The market consists of more than 400 government agencies. EGADS has 8 modules, namely accounting, fund management, controlling, material management, human capital management, user administration, project system, and analytics and reporting. Innovation Associates Consulting is the contractor of the government’s accrual accounting system called the Integrated Government Financial and Accounting Management System (iGFMAS). The counter closed at 48.5 sen.

MST Golf signs underwriting agreement with RHB

On 18 Apr, Malaysia’s largest chain of golf specialty retail outlets received the Securities Commission’s approval to list on the Main Market. The initial public offering (IPO) involves the issuance of 228m shares, consisting of a public issue of 160m new shares and an offer for sale of 68m existing shares. 178.6m shares are for institutional and selected investors, including Bumiputera investors approved by the Ministry of Investment, Trade and Industry. 49.4m shares are for the Malaysian public and the company’s directors, employees and persons who have contributed. RHB Investment Bank will underwrite the 41.5 million shares made available for the Malaysian public. The company will launch its prospectus by the end of Jun.

Glostrext signs underwriting agreement with M&A Securities

The initial public offering (IPO) and listing on the ACE Market entails the issuance of 105.83m new shares (26% of its enlarged shares) and an offer for sale of 16.28m existing shares. The Malaysian public will get 20.35m shares via balloting. Pink forms comprise 10.18m shares for eligible directors, employees and persons who have contributed to Glostrext. The balance 75.3m shares are for private placement. M&A Securities will underwrite 30.53m shares for the Malaysian public and pink form allocations. The company provides piling, structural and geotechnical-related services, covering instrumentation, testing and monitoring services to construction projects and completed buildings and infrastructure. It has more than 30 years presence in Malaysia and 14 years in Singapore. Its projects include the Petronas Twin Towers, Merdeka 118, Tuas water reclamation plant, Changi Airport’s intra airside road connection, second parallel taxiway and fire station number 2, and the Naga 3 integrated entertainment complex in Cambodia. The IPO proceeds will be used for expanding its structural and ground instrumentation and monitoring business into Singapore. The company is also promoting its off-site structural and ground instrumentation and monitoring services using its Glostrext WiNA platform which has market potential in Singapore. M&A Securities is also the adviser, sponsor and placement agent.

Singapore’s too much money problem

Around the world, Singapore banks are in the rarest of circumstances being inundated with deposits but having scarce options to deploy. In May, DBS chief executive officer Piyush Gupta said that the bank lent the Monetary Authority of Singapore (MAS) SGD30b because there were no other opportunities. MAS’ standing facility accepts overnight deposits at 2.7%-4%, whereas a mortgage loan can yield north of 3% and credit cards over 27%. As the wealthy in Asia shift their money to safe havens, Singapore benefitted. DBS’ total deposits jumped 31% to SGD529b in Dec 2019-Mar 2023, far exceeding the 16% growth in total loans to SGD417b. Although flush with cash, local banks see a dimmer outlook for loan growth against a background of global economic slowdown. The Japanese financial institutions are also facing trillions of dollars of surplus liquidity, which have driven them down the risk curve. However, some banks have become cautious recently.