The week that was - Top Glove, AirAsia X, MR DIY, market volatility

Top Glove ups compensationTOP Glove Corp Bhd said on Tuesday that it will pay RM136mil in remediation fees to its migrant workers, more than double the amount the company had estimated in August.

The company said it will pay out the compensation over the next 10 months from October. The company has made a small amount of payout in September.

AirAsia X’s existential crossroadsAIRASIA X Bhd (AAX), the long-haul budget airline, submitted on Tuesday a proposal to restructure debts worth RM63.5bil to be reconstituted into an acknowledgement of indebtedness for a principal amount of up to RM200mil, or about 0.3% of its original value.

Aside from its proposed debt restructuring, the cash-strapped airline has also proposed to undertake a reduction of 90% of the issued share capital and consolidation of every 10 existing ordinary shares in AAX into one AAX share.

AAX also said it plans to raise up to RM500mil, including under a government-guaranteed loan and/or raising funds from equity providers.

MR DIY’s initial public offering HOME improvement retailer Mr DIY Group launched its RM1.5bil initial public offering (IPO) on Tuesday, en route to becoming the largest listing on Bursa Malaysia in over three years.

Based on an initial retail price of RM1.60 a share, the IPO values the company at RM10bil.

This was slightly more than 30 times the net profit of RM317mil made by the company in the financial year ended Dec 31,2019, before the Covid-19 pandemic. For the first six months of 2020, net profit was at RM115mil.

Of the total RM1.5bil to be raised, RM1.2bil will go to the company’s promoters – the Bee family and private equity firm Creador – who are offering to sell their shares. The remaining RM300mil proceeds will be used to reduce the group’s debts and pay for listing expenses.

Rising market volatility

INVESTORS are seeing a lot more volatility in the financial market ahead of the US presidential election on Nov 3.

From US President Donald Trump’s Covid-19 diagnosis to his tweet announcing an end to stimulus stalks with rival Democrats, as well as fresh threats to break up technology giants, new surprises continue to rattle nervy investors worldwide.

The CBOE Volatility Index, the widely watched US measure of stock swings known as the VIX, has risen for sixth straight sessions and was heading higher on Wednesday.

A similar gauge for US Treasuries has also gone up, after weeks of relative calm.

Trump on Wednesday launched a series of fresh tweets urging Congress to pass piece-meal aid packages for targeted industries, small business and consumers, backpedaling from his earlier stance to unilaterally end negotiations.

Hopes of a bigger US stimulus post-election lifted Asian investors’ mood yesterday, but analysts said with Trump facing a tough re-election prospect, his increasingly unpredictable moves will add fuel to the market’s wild swings in the run-up to the US election.