99 Speedmart IPO: Record-Breaking Success Amidst Non-Shariah Compliance Concerns

While 99 Speedmart’s IPO set records as the largest in seven years, the undersubscription of the Bumiputera allocation by 46% highlights significant concerns over its non-Shariah compliant status.

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Monday (9 Sep) marked a historic moment for 99 Speedmart, which launched the largest IPO on the Malaysian stock exchange in seven years.

Opening at RM1.85, a sweet 20 sen above its RM1.65 issue price, the stock’s first trade was a jaw-dropping 53,819,100 shares, instantly making it the darling of the market.

As the day unfolded, 99 Speedmart’s stock continued its upward journey, peaking at RM1.92.

That’s a 27 sen jump, or a 16.36% increase, showing that investors are all-in on the company’s growth story.

With 99 Speedmart's listing, Malaysia's total IPO proceeds in 2024 is now the highest in seven years at nearly $1.4 billion pic.twitter.com/yAioKSeULT
— Afiq Isa (@pelabursaham) September 9, 2024

Shariah Principles Matter

Despite this impressive financial debut, a notable aspect of the IPO was the undersubscription of the Bumiputera allocation, shedding light on deeper investor concerns.

The Bumiputera allocation was 46% undersubscribed, with only 45.37 million out of 84 million shares taken up.

This shortfall led to the reallocation of the remaining shares to non-Bumiputera investors, raising questions about the underlying reasons for the lack of interest from Bumiputera investors.

Some see the company’s non-Shariah-compliant status as a factor contributing to this undersubscription.

IPO Speedmart ni Bumiputera punya allocation undersubscribed by 46%. daripada 84 juta saham ditawarkan, hanya 45.37 juta dilanggan. yang mana tak dilanggan re-allocated kepada pelabur bukan bumiputera.

isu utama mungkin kerana non-shariah compliant status. https://t.co/gsv4AxKeTI pic.twitter.com/GsaK4ybbc6
— Syahir (@syahirsyhr) September 9, 2024

For Bumiputera investors, adherence to Shariah principles is critical to investment decisions.

The absence of Shariah compliance may have deterred these investors, who often prioritize aligning their investments with Islamic financial principles.

99 Speedmart is considered non-compliant with Shariah law primarily due to the sale of alcohol and other non-halal products.

Balancing Act: Non-Compliance vs. Affordability

Despite its non-compliance, 99 Speedmart provides affordable shopping, meeting various customer needs with a diverse product selection, from beers to cat food.

With over 2,600 outlets strategically located across Malaysia, 99 Speedmart is dedicated to serving the Malaysian communities

The journey began in 1987 when Lee opened a grocery store named Pasar Raya Hiap Hoe by the riverbank in Klang.

Initially known as Pasar Mini 99, it was later rebranded to 99 Speedmart, marking the start of its transformation into the retail giant we see today.

Boosting Credibility and Future Growth

As 99 Speedmart continues solidifying its market dominance, today’s IPO is more than a financial milestone; it’s a celebration of ambition, resilience, and the power of dreams.

After contracting polio in childhood, CEO Lee Thiam Wah is wheelchair-bound but has utilized his experiences and determination to create a successful business life.

“Listing on the stock exchange not only boosts our credibility but also strengthens our management systems for future growth,” he said, as quoted by Sin Chew.

Lee’s latest net worth is estimated to be around USD3.4 billion (RM15.6 billion), reflecting his success.

So, here’s to 99 Mini Mart—a true market star on the rise!

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