KUALA LUMPUR: Envair Holding Bhd's shares suffered their steepest decline in more than a month after a substantial shareholder Deepak Jaikishan sold his entire stake, almost three weeks after buying it.
Envair, a manufacturer of air and water filters, saw its shares fell by over 15 per cent to an intraday low of 26.5 sen yesterday.
It was its fourth consecutive day of decline. It was traded 39.5 sen early this week.
Its trading volume has also reduced significantly. This week, its average trading volume was about 12.5 million shares, more than 60 per cent lower than the average of 31.44 million shares previously.
Filings to Bursa Malaysia on Wednesday showed that Deepak had sold six million shares on December 14 in the open market. On the day of the disposal, Envair shares were traded between 34.5 sen and 38 sen.
He bought the six million shares on December 2 for RM1.32 million or 22 sen each. This means Deepak could have make at least 56 per cent return on investment (ROI), or a minimum of RM750,000.
Deepak did not inform Bursa Malaysia on why he sold the stakes. He had earlier told the media that he was "taking a long-term view" of his investment and would soon raise his stake to over 10 per cent.
He had also reiterated that he "will not be selling down" his stakes in the future.
"A major shareholder's exit could be driven by many factors - it may be due to the relationship between itself and the board and the management, or maybe the shareholder sees better investment opportunities elsewhere.
"Nevertheless, a stellar ROI during a period of volatility and uncertainty is always a good reason for an investors to take profit," said a research head from a local brokerage.
The research head added that Deepak may have seen that Envair's plan to venture into the oil and gas business to be more challenging than anticipated.
Two months ago, the company said it would supply two million barrels of light crude oil monthly for 60 months to An Hong Shenzhen.
Deepak is not the first investor who bought a substantial stake in Envair, only to dispose of it shortly after.
On November 1, Chinese national Jiang Chuan Yi bought 6.75 per cent in the company, only to dispose of the entire stake three weeks later.
