Mercury Securities Group Bhd managing director Chew Sing Guan (left) and Public Investment Bank Bhd deputy chief executive officer Alynn Lim Geok Lian (right).
PETALING JAYA: Mercury Securities Group Bhd
will be utilising the bulk of the proceeds from its initial public offering (IPO) for margin financing facility services, as it anticipates greater revenue recognition from this segment.
Managing director Chew Sing Guan said the segment recorded a compounded annual growth rate of 36.09% from financial year 2019 to 2022.
This was due to higher demand for margin financing facility services from its stockbroking clients.
Chew said once listed on the ACE Market of Bursa Malaysia on Sept 19, 2023, the RM26.86mil allocated will help to further enhance the group’s revenue.
“For trading execution, the income from these trades are not pronounced, so margin financing is the easiest option,” he said at the launch of Mercury’s prospectus.
“We know the market, we know who is doing what to who, which will position us in the best place to select the best clients.”
Chew said the group will cater to a wide range of clients, from premium to small investors. “However, we will still be concentrating on big-ticket borrowers,” he said.
Meanwhile, Chew said Mercury is confident that the IPO of 157.09 million shares at an issue price of 25 sen per share will be oversubscribed multiple times.
The corporate finance advisory services provider said it aims to raise RM39.27mil, of which the remainder of the proceeds will go towards the enhancement of digitalisation programme and marketing activities for its stockbroking business and operations, amounting to RM2.88mil.
A total of RM4.63mil will be used as working capital and RM4.90mil for listing expenses.
Chew believes the market will be better in the future and that investor sentiment will improve, adding to the average daily volume.
He said there has always been a desire to trade among the population but the problem is that costs have been high.
Chew highlighted that the problem in Malaysia is that the market has been flatlining and that it needs “spark”.
“Give it a little bit of time and investors will come back,” he said.
Applications for Mercury’s public issue are open from Aug 28, 2023 until 5PM, Sept 5, 2023.
Chew said the group plans to leverage the listing to continue to innovate, digitise and expand its product and service offerings.
“We are embarking on a journey that is not just a corporate milestone but a springboard for our group to reach higher and deeper into the capital market,” he said.
Chew said Mercury will be the first stockbroking company in the last 20 years to seek a listing on Bursa Malaysia.
Public Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO exercise.
