KUALA LUMPUR (May 8): Fibromat (M) Bhd (KL:FIBRO) fell 10% on its maiden day on the ACE Market following the geotechnical services firm's listing transfer from the LEAP Market. 

Shares of Fibromat opened at 46 sen on Thursday, versus its initial public offering price (IPO) of 55 sen per share. The stock slipped to as low as 41 sen and ended the day at 49.5 sen after more than 29 million shares changed hands.

At the closing bell, the company had a market capitalisation of RM123 million.

Fibromat is the latest in a string of first-day flops on the ACE Market as investors turn increasingly selective in poor general market conditions. Before Fibromat, Bursa Malaysia hosted eight ACE Market listings since March, and all sank below their IPO prices on their first day.

Demand from investors during Fibromat’s IPO was also weak with total applications barely covering the number of shares offered.

The IPO, nevertheless, raised a total of RM31.4 million, of which RM17.8 million went to the family-managed Fibromat, while managing director Ng Kian Boon pocketed RM13.6 million from selling down his own shares.

One of his sons, Ng Chun Hou, serves as an executive director, while his other son Ng Chun Yew is the senior operations manager.

Funds raised during its listing on the LEAP Market in May 2019 have been depleted.

Proceeds from the ACE Market IPO will go towards funding purchase of new machinery — including stitching machines and dust collectors — as well as support the formation of an in-house prefabricated vertical drain installation team and the acquisition of five hydraulic excavators.

The rest will be used as working capital and to defray listing expenses.

M&A Securities was the principal adviser, sponsor, underwriter, and placement agent for the IPO.

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