UNITRAD 0247 UNITRADE INDUSTRIES BERHAD's frustrating opening on Bursa debut amid plunge of global stocks, bonds

 UNITRAD 0247 UNITRADE INDUSTRIES BERHAD's frustrating opening on Bursa debut amid plunge of global stocks, bonds

The debut was affected by the weaker market sentiment following the plunge of global stocks and government bonds that had pushed the US S&P 500 Index into a bear market.

KUALA LUMPUR: Unitrade Industries Bhd made its debut on Bursa Malaysia's ACE Market at 26.5 sen, 17.2 per cent lower than its initial public offering (IPO) of 32 sen.

The debut was affected by the weaker market sentiment following the plunge of global stocks and government bonds that had pushed the US S&P 500 Index into a bear market.

Unitrade managing director Nomis Sim said the group did know what to expect prior to the listing this morning and acknowledged that it was not the best time to be listed based on the global market performance since Friday.

"However, we are confident with the company and its fundamentals. We will continue to grow irrespective of the share price today," he said during a virtual briefing today.

The Selangor-based industrial company raised a total of RM100 million from the public issue under its IPO, of which RM50.5 million or 50.5 per cent would be deployed as working capital.

Another RM39.8 million or 39.8 per cent will go towards repayment of bank borrowings.

Meanwhile, RM5.0 million will be allocated for capital expenditure to set up a pipe fabrication centre, and the balance of RM4.7 million or has been earmarked to defray listing expenses.

"With the recent relocation to a warehouse double the size of our previous one, coupled with the IPO proceeds raised, we now have the capacity and capability to increase our inventory volume and product range to meet the escalating demand for building materials from the construction sector.

"In addition, we will be among the first in Malaysia to build a new pipe fabrication centre to broaden our value-added service offerings to our customers.

This facility will provide a long list of benefits to our customers, such as manpower reduction, acceleration of construction progress, and more efficient use of space at construction sites, to name a few," said Sim.

Commenting on the construction sector, Sim said there had been a slowdown in the industry mainly due to the lack of construction workers.

The sector, however, is expected to pick up this year, as forecasted by the Ministry of Finance which is anticipating an 11.5 per cent growth for the industry.

"We are positive and confident that we will grow in tandem with this projection," he said.

On a macro view, Sim said the company was upbeat on the building materials industry, buoyed by the acceleration and rollout of major infrastructure projects.

He noted that Unitrade had an established track record in supplying to large scale projects in the past and hence, it was confident in capitalising on these opportunities.

"Besides new projects, our products are heavily used in refurbishments, retrofitting, repair and maintenance works as well.

"As such, Unitrade plays a critical and holistic role in supporting the full lifecycle of buildings and infrastructures," added Sim.

https://www.nst.com.my/business/2022/06/804759/unitrades-frustrating-opening-bursa-debut-amid-plunge-global-stocks-bonds