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FRONTKN-WA attracts interest on Underlying Share’s 47 sen off Market Trade

The shares and warrants of surface treatment specialist Frontken Corporation Berhad attracted huge interest and the mother share topped Bursa Malaysia mid-day volume list after a block of 27.6 million shares crossed at 47.6 sen late Friday, which was a hefty premium of nearly 700% above market price. Stock market data showed the 2.72% stake, which was transacted in an off-market deal at 47.6 sen, was 41.1 sen above the then market price of 6.5 sen.  According to Frontken annual report, this exact block of shares could be traced to Malaysia Nominees (Asing) Sendirian Berhad for OCBC Capital Investment (Asia) Limited (OCIA), which is the fourth largest shareholder of the company.  Interestingly, OCIA was involved in a lawsuit against former Frontken major shareholder Wong Hua Choon.

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.

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Analysis

Warrant Ranking by Premium (7 Aug 2016)

The following is the list of Warrant Ranking by Premium

Warrant Ranking 7 Aug 2016 by Premium

MALAYSIA LOAN STOCK ANALYSIS 27 MAY 2015

The following is a list of loan stock listed on Bursa Malaysia as at (date).

Malaysia Loan Stock Analysis 270515

Change in Shareholdings (1/5/2015 - 31/5/2015)

The following is a list of change in shareholdings as at (date).

May 2015 (1 May 2015 - 31 May 2015)

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