Ace Innovate upbeat on prospects as investors seek safe havens

Investors often take refuge in precious metal and commodity investments in times of volatility, says Go


ACE Innovate Asia Bhd (AIAB), which debuted on Bursa Malaysia’s Leading Entrepreneur Accelerator Platform (LEAP) Market yesterday, is positive on its prospects as investors seek safe havens amid ongoing global geopolitical uncertainties.

The company is mainly involved in the bullion trading of physical gold products including scrap gold bars, cast gold bars and minted gold bars.

Its ED and CEO Go Yoong Chang said global market uncertainties will play to the company’s favour as investors often take refuge in precious metal and commodity investments in times of volatility.

“Whenever there’s a spike or the gold price trend is going down, to us it’s a fluctuation that’s beneficial in terms of volume. When there is fluctuation, people will tend to buy and sell more and this means business to us,” he told a press conference after the listing ceremony in Kuala Lumpur yesterday.

Gold prices hit a seven-year high on Monday following the assassination of top Iranian army general via US airstrike in Baghdad last Friday. Oil prices also topped US$70 (RM286.48) per barrel for the first time since Sept 2019.

Yesterday, however, spot gold lost as much as 0.7% before paring losses to rise 0.2% during the afternoon trading session, while Brent crude was down 0.6% as at press time.

After opening at 27 sen yesterday — a 3.8% or one sen premium over the offer price of 26 sen — shares of Ace Innovate closed 26.9% or eight sen higher at 33 sen.

The listing, which was Malaysia’s second IPO of the year, saw 500 shares transacted at the opening bell.

Both AIAB and Supergenics Bhd, which made its debut on Monday, are listed on the LEAP Market, which enables underserved small and medium emerging companies to gain access to capital markets and raise funds.

AIAB placed out 39 million new shares, representing 13% of its enlarged share capital. A total of RM10.14 million was raised from the IPO.

The gold trader had a market capitalisation of RM78.01 million based on its issue price upon listing.

Go expects AIAB to record double-digit growth in its topline in the near future, as the gold bullion trading industry domestically and regionally continues to show promising growth prospects.

“With our strong portfolio of customers, we are confident that AIAB will be well-positioned to ride on the industry’s growth in the long term,” he said.

The proceeds will be utilised mainly for business and operational expansion, which include RM8.95 million (88.33%) for working capital, RM200,000 (1.97%) for enhancement of office safety features, RM64,000 (0.63%) for marketing and advertising expenses and RM920,000 (9.07%) for listing expenses.

2020 also looks to be an interesting year for the group due to the upcoming US presidential election, which will likely affect gold prices, Go added.

“When it gets closer to the election period, gold prices will tend to move quite a bit, although this will depend on market sentiment.

“If the sentiment is good and the economic outlook looks bright, gold prices will come down and vice versa,” he stated.