KUALA LUMPUR: Securities Commission (SC) chairman Tan Sri Zarinah Anwar has warned investors to be cautious over the rising number of penny stocks whose prices have skyrocketed of late without material corporate developments.
“I would like to remind investors that they have to exercise caution and make informed investment decisions. Everybody has a role to play in terms of ensuring fair and orderly trading in the market,” Zarinah commented when asked about the growing speculative interest in penny stocks.
She noted that the SC and Bursa Malaysia have surveillance systems in place and monitor all price movements for all counters listed on the exchange.
“Action will be taken depending on the outcome of our surveillance,” she told reporters on the sidelines of the 5th International Islamic Capital Market Forum yesterday.
Recently, penny stocks, particularly on the ACE Market, have seen heavy trading volume and sharp spikes in share prices. Despite poor financial results, these stocks have garnered strong speculative interest.
Among the counters, notably, is Harvest Court Industries Bhd. In barely four weeks, the stock has jumped 16 times from 8.5 sen to RM1.40 yesterday.
The company saw the emergence of a new shareholder, Datuk Raymond Chan, who bought part of his 13.83% stake from the company’s managing director Ng Swee Kiat. Ng later proposed to Affin Bank Bhd to acquire the bank’s 18.3% equity interest for 25 sen per share.
Other penny stocks that have joined the euphoria include Karambunai Corp Bhd, Envair Holdings Bhd, Focus Dynamics Technologies Bhd, Sanichi Technologies Bhd and GPRO Technologies Bhd.
Bursa has queried some of these counters on unusual market activity (UMA). Most of them have replied by saying the board is not aware of any material corporate developments in the companies. Those queries, however, do not seem to have stopped some of those counters from climbing further.
Asked about the share swap deal between state investment arm Khazanah Nasional Bhd and Tune Air Sdn Bhd of shares in Malaysian Airline System Bhd (MAS) and AirAsia Bhd, Zarinah said the SC is reviewing all the trading data. “We will make a decision upon our review and determination of our findings.”
There is no time frame for the investigation, she added.
Deputy Finance Minister Datuk Dr Awang Adek told the Dewan Rakyat last week that the SC and Bursa have launched an investigation into the swap deal involving MAS and AirAsia shares. He said the probe would also look into the possibility of insider trading and will take time because it involves many accounts and a huge value.
He said if the probe finds evidence of insider trading, the Malaysian Anti-Corruption Commission may also be invited to investigate.
Under the swap deal announced in August, Tune Air and Khazanah, major shareholders of AirAsia and MAS respectively, agreed to swap their shares in the two airlines. After the swap, Tune Air now owns 20.5% equity interest in MAS, while Khazanah holds a 10% stake in the low-cost carrier.
This article appeared in The Edge Financial Daily, November 11, 2011.
“I would like to remind investors that they have to exercise caution and make informed investment decisions. Everybody has a role to play in terms of ensuring fair and orderly trading in the market,” Zarinah commented when asked about the growing speculative interest in penny stocks.
She noted that the SC and Bursa Malaysia have surveillance systems in place and monitor all price movements for all counters listed on the exchange.
“Action will be taken depending on the outcome of our surveillance,” she told reporters on the sidelines of the 5th International Islamic Capital Market Forum yesterday.
Recently, penny stocks, particularly on the ACE Market, have seen heavy trading volume and sharp spikes in share prices. Despite poor financial results, these stocks have garnered strong speculative interest.
Among the counters, notably, is Harvest Court Industries Bhd. In barely four weeks, the stock has jumped 16 times from 8.5 sen to RM1.40 yesterday.
The company saw the emergence of a new shareholder, Datuk Raymond Chan, who bought part of his 13.83% stake from the company’s managing director Ng Swee Kiat. Ng later proposed to Affin Bank Bhd to acquire the bank’s 18.3% equity interest for 25 sen per share.
Other penny stocks that have joined the euphoria include Karambunai Corp Bhd, Envair Holdings Bhd, Focus Dynamics Technologies Bhd, Sanichi Technologies Bhd and GPRO Technologies Bhd.
Bursa has queried some of these counters on unusual market activity (UMA). Most of them have replied by saying the board is not aware of any material corporate developments in the companies. Those queries, however, do not seem to have stopped some of those counters from climbing further.
Asked about the share swap deal between state investment arm Khazanah Nasional Bhd and Tune Air Sdn Bhd of shares in Malaysian Airline System Bhd (MAS) and AirAsia Bhd, Zarinah said the SC is reviewing all the trading data. “We will make a decision upon our review and determination of our findings.”
There is no time frame for the investigation, she added.
Deputy Finance Minister Datuk Dr Awang Adek told the Dewan Rakyat last week that the SC and Bursa have launched an investigation into the swap deal involving MAS and AirAsia shares. He said the probe would also look into the possibility of insider trading and will take time because it involves many accounts and a huge value.
He said if the probe finds evidence of insider trading, the Malaysian Anti-Corruption Commission may also be invited to investigate.
Under the swap deal announced in August, Tune Air and Khazanah, major shareholders of AirAsia and MAS respectively, agreed to swap their shares in the two airlines. After the swap, Tune Air now owns 20.5% equity interest in MAS, while Khazanah holds a 10% stake in the low-cost carrier.
This article appeared in The Edge Financial Daily, November 11, 2011.
