KUALA LUMPUR: Mercury Securities Group Bhd aims to raise RM39.27 million from Initial Public Offering (IPO) to support its expansion and digitalisation plans.
Of the proceeds, 68.39% or RM26.86 million will be allocated to expanding margin financing facility services. Meanwhile, 7.33% will be dedicated to enhancing the digitalisation program and marketing activities in the stockbroking business and operations of the group. Additionally, RM4.63 million is allocated for working capital, and RM4.90 million for listing expenses.
Mercury through its wholly-owned subsidiary, Mercury Securities Sdn Bhd, is principally involved in the provision of stockbroking, corporate finance advisory services and other related businesses such as margin financing facilities services, underwriting and placement services, as well as provision of nominee and custodian services.
Regarding expanding its margin financing facility services, Mercury Securities managing director Chew Sing Guan said that these services currently contribute 21% to the total income.
“We believe margin financing still has a very good margin...this is probably the best return for our buck. Meanwhile, for trading and execution, the income is not as pronounced. So, margin financing is the best and easiest...(which is why the majority of the IPO proceeds will go to margin financing facility services),” he told a media conference at its prospectus launch in conjunction with its IPO and listing on the ACE Market of Bursa Malaysia today/yesterday.
Chew also shared, “In terms of our digitisation programme, it is for our back office process system, which needs more automation so it is less reliant on humans.”
Chew stated that Mercury has been profitable every single year since it started operations in 1992, despite the ups and downs of the stock market.
The current highest profit margin is derived from the stockbroking segment, accounting for approximately 60% of the segmental profit, while the rest is generated from corporate finance.
Additionally, Mercury is the first stockbroking company to seek and gain an IPO listing in Bursa in the last 20 years.
“We plan to leverage this listing to continue to innovate, digitise and expand our product and service offerings. With our range of products and services that we now offer, which include stockbroking, corporate finance, proprietary trading, margin financing and research advisory, custodian and nominee services,” he said.
He commented that the reduction in stamp duty for shares traded on Bursa Malaysia by the Securities Commission will revitalise and add more vibrancy and encourage higher trading volumes.
“This is the right move. Even China and Hong Kong are moving towards cutting stamp duty on stock trading to stimulate the market,” he noted.
The stamp duty rate for shares traded on Bursa Malaysia is reduced from 0.15% to 0.1% of the contract value from July 2023 onwards, subject to a maximum cap of RM1,000 per contract.
“Basically, there is always a desire by our population to trade...but the cost is high and the market is flatlining. We need a spark, and the spark will be this stamp duty move. And perhaps as the world economy improves...the volume will continue to pick up. (And) the frequent IPOs brought to the market will keep the investors attention,” he said.
Upon its listing on the ACE Market, Mercury Securities will have a market capitalisation of RM223.25 million based on the issue price of RM0.25 per share and its enlarged issued share capital of 893.00 million shares.
Public Investment Bank Bhd deputy CEO Alyn Lim Geok Lian stated that Mercury Securities’ longstanding presence has not only solidified their market position but also enabled them to establish a lasting client base.
“We believe that the group is in capable hands and will continue to scale greater heights and create more value for all its stakeholders,” she said.
Public Investment Bank is the principal adviser, sponsor, sole underwriter and sole placement agent for this IPO exercise.
Source: The Sun Daily
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