Ace Innovate to expand gold investment business

KUALA LUMPUR: Leap Market bound, Ace Innovate Asia Bhd has big plans for its expansion in the gold bar business as it reaches close to sealing a deal with two leading banks in Malaysia to provide investors avenue to invest in syariah-compliant physical gold.

Ace Innovate, an investment holding company, has subsidiaries involved in gold bullion trading.

Although the company is in talk with the leading banks, its chief executive officer Go Yoong Chang believes the deal with “one” bank is most likely to strike in the next six months.

“In the pipeline, we are in talks with two banks. We are close to concluding the deal with one bank and provide our products within six months.

“We believe other banks will follow suit to provide our product when they see the good response from investors,” he told Starbiz.

Since the introduction of the Shariah Gold Standard by the Accounting and Auditing Organization for Islamic Financial Institutions, World Gold Council and Amanie Advisors in 2016, it has enabled gold to be accepted as a syariah-compliant investment for the first time with growing interest in gold investment in Muslim countries.

Currently, there are some banks in Malaysia, including Maybank and UOB Bank, that are providing physical gold for their investors.

Given that Ace Innovate is expected to collaborate with the financial institutions in the country, Chang said the company would offer its products to customers on a live price basis as current competitors are not providing live prices for gold.

“Currently, the banks have static gold prices data for customers, but ours is live gold data with better pricing, better reach to the banks’ account holders and redemption of gold,” he added.

In 2016, Ace Innovate was the first to launch the GDP platform in Malaysia. Currently, it has over 300 customers trading online.

In 2018, the group recorded a revenue of Rm1.09bil, a 93% increase from Rm565.47mil in 2017.

For the listing, the company said it will be issuing 39 million new shares at an indicative price of 26 sen, representing 13% of the enlarged issued share capital of Rm23.19mil.

Ace Innovate is expected to list on the Leap Market before year-end.

It plans to raise about Rm10.14mil. Following the listing, the group is expected to have a market capitalisation of Rm78mil with a price-to-earnings ratio of 16.4 times.

From the amount raised from the listing, it intends to allocate Rm8.96mil for working capital requirements, in particular to purchase scrap gold bars, cast gold bars and minted gold bars.

The rest of the proceeds will be used to defray the estimated listing expenses, as well as to increase marketing efforts, it said.

Post-listing on the Leap Market, Chang said the group plans to graduate to the Ace Market.

Besides that, the company plans to expand its product reach in Sarawak and Sabah pending approval from the relevant authorities.

Moving forward, Ace Innovate expects next year to be a “good” year for gold prices amid ongoing uncertainties surrounding Brexit and Us-china trade spat which is causing price fluctuations.

“Next year will be a good for us in terms of revenue from price fluctuations and also progress of our target markets due to volatility,” he noted.

Chang expects gold price to rise to US$1,614 per ounce by year-end. As at Friday’s close, gold was trading at US$1,504 per ounce.