MR DIY opens books for largest Malaysian IPO in three years

MR DIY opens books for largest Malaysian IPO in three years
MR DIY plans to add 307 stores in the next two years. (Supplied)
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Updated 07 October 2020

MR DIY opens books for largest Malaysian IPO in three years

MR DIY opens books for largest Malaysian IPO in three years
  • The trend for IPOs among Southeast Asian companies signals uptick in fundraising activity in underperforming markets

KUALA LUMPUR: Malaysian home improvement retailer MR DIY Group opened the books for its 1.5 billion ringgit ($361.71 million) initial public offering (IPO) on Tuesday, the country’s largest listing in three years.

The company fixed the offer price at 1.60 ringgit per share, giving it an estimated market capitalization of 10 billion ringgit. The bookbuild period will last seven working days, before pricing on Oct. 14 and listing on Oct. 26.

MR DIY joins a number of other Southeast Asian companies planning IPOs this year, including Thailand’s Siam Cement Group Packaging and Philippines’ Converge ICT Solutions, a trend that signals an uptick in fundraising activity in underperforming markets.

The MR DIY listing is on track to be the largest in Malaysia since Lotte Chemical Titan raised 3.77 billion ringgit in July 2017.

Offering up to 941.5 million shares, representing around 15 percent of its enlarged issued share capital, MR DIY said it planned to use the IPO proceeds primarily to repay bank borrowings.

Its prospectus showed more than a dozen cornerstone investors including funds under BlackRock, Matthews, Aberdeen Standard Investments and Fidelity Investments as well as JPMorgan Asset Management, AIA Bhd and Affin Hwang Asset Management.

MR DIY, which has around 29 percent market share in Malaysia and 674 stores in its home market and Brunei, had planned to list in the second quarter of the year but delayed amid concerns about rising coronavirus case numbers.

Revenue grew 12 percent in May and June after a partial lockdown in Malaysia was eased, Chief Executive Officer Adrian Ong said. “Reviewing the performance of our business, the resilience of our business, the continued growth, it clearly made sense for us to come back to the market,” Ong said in a virtual press briefing.

MR DIY plans to add 307 stores in the next two years, estimating the home improvement retail sector will grow at 10.2 percent compound annual growth rate in the next four years.

The value of Southeast Asian IPOs so far this year is $4.6 billion, up from $3.1 billion a year ago, Refinitiv data shows, mainly due to $3 billion raised by Thailand’s Central Retail in February.

Saudi private sector rebounds with growth at 10-month high

Updated 04 December 2020

Saudi private sector rebounds with growth at 10-month high

Saudi private sector rebounds with growth at 10-month high
  • Steep rise in sales and growing business confidence spark jump in purchasing, hiring activity

RIYADH: Business activity in Saudi Arabia has risen to its highest level since January this year, showing the Kingdom’s economy is beginning to overcome the worst effects of the coronavirus pandemic.

According to IHS Markit’s Purchasing Managers’ Index (PMI) Survey, the acceleration of output growth in the Saudi economy in November was driven by a steep rise in sales and strengthening business confidence.

The survey found that input purchasing rose, while employment growth also returned for the first time since January. Input cost inflation also quickened, leading to a stronger increase in average output charges.

The index has now registered above the 50.0 no-change mark for three months in a row, highlighting a sustained recovery after the economic downturn due to the pandemic.

The Saudi PMI rose to 54.7 in November from 51 the previous month — the strongest improvement since January. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared with the previous month, and below 50 an overall decrease.

Both domestic and foreign sales rose last month, marking only the second upturn in new export orders since February.

Business confidence for the year ahead also improved notably during the month. In particular, firms were encouraged by the Saudi government’s easing of lockdown curbs and news of a breakthrough in the development of a vaccine.

Accelerated rises in output and new orders led Saudi firms to sharply expand purchasing activity during November. In addition, hiring activity turned positive and a number of companies linked increased employment to rising demand.

Commenting on the latest survey, David Owen, an economist at IHS Markit, said: “A third successive rise in the Saudi Arabia PMI pointed to an economy getting back on its feet in November. Supported by output and new business growth reaching 10-month highs, the data suggests a strong end to the year for the non-oil private sector. Notably, employment started to rise, while business confidence strengthened in the wake of encouraging vaccine news and sharper demand growth.”

Saudi economist and financial analyst Talat Zaki Hafiz told Arab News: “The improvement is due to many factors, such as the reopening of the market with the ease in lockdown and, finally, the lifting of the curfew. The return to normality has had a significant impact on private sector performance.”

Hafiz added: “Things will get much better by the next year. We have also noticed an improvement in oil prices recently and this will improve things significantly.”