1 week Ago
KUALA LUMPUR: SumiSaujana Group Bhd succumbed as the first initial public offering (IPO) casualty in a market roiled by the United States (US) reciprocal tariffs, debuting with a 25 per cent discount, the sharpest first-day fall on Bursa Malaysia in at least a year.The tariffs, enacted yesterday following President Donald Trump's announcement on April 2, have thrown both European and Asian stock markets into a tailspin with some major indices plunging to levels unseen in decades.Listed on the ACE Market, SumiSaujana is the fifteenth IPO on Bursa Malaysia in a year marred by tariff-driven volatility, following the Main Market debut of Johor-based express bus operator HI Mobility Bhd on March 28.
The oil and gas specialty chemicals manufacturer opened at 18 sen, six sen below its IPO price of 24 sen per share. The stock hit an intraday low of 16.5 sen, down 31.
25 per cent before settling back at 18 sen with 103.58 million shares traded. This marks the worst IPO performance in the past 12 months since Keyfield International Bhd's Main Market debut on April 22, 2024, according to Bursa Malaysia data.
SumiSaujana's poor debut came amid broader market jitters with the FTSE Bursa Malaysia KLCI now at 1,405.76, its lowest level in nearly two years. This is on top of the IPO's public tranche being oversubscribed by only 1.
85 times, a far cry from the demand seen by its predecessors.Commenting on the group's debut performance, executive deputy chairman Toh Chee Seng said there is never a right time to enter the market, as "conditions are always unpredictable.""Historically, data shows that no one can accurately time the market.
So there's never a good or bad time to list a company," he said in a virtual press conference in conjunction with the listing. Bursa Malaysia has seen a mixed IPO performance this year, with the first seven debutants enjoying gains between 8.33 per cent and an impressive 98.
86 per cent, topped by Oriental Kopi Holdings Bhd.ES Sunlogy Bhd, the eighth IPO of the year, was the only one to close its debut unchanged at its offer price on Feb 20, signaling the beginning of a declining trend among IPOs thereafter.The subsequent five market entrants — Pantech Global Bhd, Saliran Group Bhd, Lim Seong Hai Capital Bhd, Wawasan Dengkil Holdings Bhd and Chemlite Innovation Bhd — all ended their first trading day below their IPO prices.
However, hopes for IPOs briefly perked up after HI Mobility, the year's fourteenth IPO, broke away from the series of lackluster debuts that began with Pantech Global on March 3.HI Mobility, known for operating the Johor Bahru-Singapore Causeway Link, launched its trading on Bursa Malaysia at a 4.1 per cent premium over its IPO price of RM1.
22, and closed its first day up by 9.02 per cent at RM1.33.
This was despite the IPO only capturing modest interest, being oversubscribed 6.57 times compared to the previous 13 IPOs, which ranged from 11.88 to an extraordinary 245.
42 times. SumiSaujana specialises in drilling fluid chemicals, production chemicals and refinery additives, with over 70 per cent of its revenue coming from international markets including the Asia Pacific, Middle East, Africa, Europe, and the Americas.The company plans to use the RM74.
4 million raised from its IPO for several projects, including the acquisition and consolidation of its operational facilities with a new warehouse and corporate office in Puncak Alam.Meanwhile, Trump's reciprocal tariffs, supposedly intended to rectify long-standing trade imbalances, has stirred significant turmoil across global markets, affecting stocks, currencies and commodity prices worldwide.The move, widely condemned by global leaders, has prompted various countries to seek negotiations with the US to mitigate its broader impact, with China being slapped with a severe 104 per cent tariff.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said SumiSaujana's lacklustre debut might reflect widespread investor caution due to fears of further declines in equity prices. He noted that the FBM KLCI is nearing bear market territory, having fallen nearly 20 per cent from its peak on Aug 30, 2024, when it reached 1,678.80 points.
"Judging from today's level, the key index has gone down by 16.7 per cent from its recent peak. Traders and investors are wary whether the equity prices would fall further," he told Business Times.
Looking ahead, Bursa Malaysia's ACE Market is poised to welcome new listings from MSB Global Group Bhd on April 15 and WTEC Group Bhd on April 29, while Cuckoo International (Mal) Bhd and Reach Ten Holdings Bhd are scheduled for a Main Market debut on April 30 and May 2, respectively.As these new entrants gear up for their debut on the local bourse, the looming question remains — how will they fare against escalating global tensions driven by Trump's aggressive trade policies?© New Straits Times Press (M) Bhd.
