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DIGISTA-WA Finally Gets a Break!


Warrants holders have the right to subscribe for shares at exercise price to become shareholders of a listed company but they are not shareholders of the company.  Hence, warrant holders are not entitled to enjoy dividend.  However, warrants holders do get protection from dilution arising from corporate exercises such as bonus issues and rights issues.  One thing warrants holders are not protected is when company undertakes private placements.  Private placements increase the share capital of the company and thus dilute the percentage of shareholding arising from exercise of warrants.  While a ten percent private placement does not dilute warrants holders very much, a few of such private placements do affect the warrants somewhat.

Accounting Irregularities Hit Frontken despite Better Profit


The share price of surface treatment specialist Frontken Corporation Berhad dropped significantly to as low as 5.5 sen after the company announced on 27 February 2013 about potential accounting irregularities involving one of its wholly owned subsidiary.  Such irregular dealings were unveiled following the resignation of senior management personnel of the subsidiary.  The potential impact of such dealings totalled some RM8.9 million and it had been provided for in the accounts of six financial years between 2006 and 2012.  The board of Frontken indicated the above incident will not have additional financial impact on the company given the amount had already been fully provided for.

Long Term Investors’ Confidence Supports IFCA Share Price


When a company proposes a fund raising exercise when there is no specific need for additional cash, investors can interpret the company’s intention in one of two ways.  It is possible that the company is raising fund ahead of a major corporate exercise involving substantial investment like a merger or corporate exercise.  Another possibility is that the company is placing a block of shares to specific investors who cannot otherwise purchase enough of the company shares in the market without pushing the share price up significantly.  In the latter case, it is likely that the share price will be well supported and may lead to price appreciation.

Sale of Warrants by Major Shareholder Creates Interest in EWEIN-WA

When a large percentage of shares are held in the hands of a few substantial shareholders, it is not unusual to expect very little trading in the company shares especially when the company’s share capital base is not very big.  Thus, a bonus issue of warrants to reward shareholders would not create any excitement if the warrants’ holding is also concentrated in a few hands.  It is only when one of the major shareholders decided to dispose his warrants holdings that the warrant will attract some interest.  This is exactly what happened to EWEIN-WA recently when Dato’ Ewe Swee Kheng, via Hijauwasa Sdn. Bhd., sold down its warrants holdings and spur some trading in EWEN-WA although the action led to a significant decline in EWEIN-WA price from around 11 sen to a low of 6 sen a few days ago.

TMCLIFE-WA Awaits Major Shareholders’ Next Move


The share price of TMC Life Sciences Berhad (TMCLIFE) had been rising steadily in the past month and a half.  From 31.5 sen at the end of November 2012, TMCLIFE share price has risen more than 30% in the last one and half month on continued accumulation by one of its major shareholders Berjaya Group.  As at 9 January 2013, Berjaya Group stake in TMCLIFE has risen to 32.2%.  This makes it holding just shy of Singapore billionaire Peter Lim’s 32.6%, who is the top shareholder of the company.  TMCLIFE share price closed at 41 sen on 16 January 2013 while its warrant TMCLIFE-WA closed at 11.5 sen.

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