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Malaysia Warrants News

New IPO With Free Warrants – “Caveat Emptor”

Giving free warrants to IPO subscribers has resurfaced in Bursa Malaysia this year after many years of absence.  Sunway Infrastructure Berhad was the first company who gave away free warrants when it was listed in 2003.  This year, MClean Technologies and soon to be listed Hibiscus Petroleum are the ones who give free warrants to IPO subscribers.  Unfortunately, giving away free warrants also means that the IPO price is overpriced.  Investors who are attracted to the free warrants attached to IPO must know that the warrant is actually “not free” because the “overvalued” IPO price will most likely drop due to profit taking.  In any case, investors should wonder why is there a need to give away free warrants at IPO stage.

After Selling Down, Insider Starts Buying Back FRB-WA

The warrant of Formis Resources Berhad (FRB-WA) has dropped almost 60% from the high of 30.5 sen achieved on the first day of listing (26th April 2011).  FRB-WA was given free to shareholders on the basis of 1 for 2.  One of the main reasons why FRB-WA has fallen off the cliff is due to selling by insiders.  The selling by insiders was especially high during the initial days of listing in late April and early May as FRB-WA was trading closer to 30 sen and shareholders were making quite a bit from the free warrant.  But after a sharp drop, Dato' Mah Siew Kwok, the CEO of the company, has finally started to buy back the warrant which he had earlier sold according to Bursa Malaysia announcement.

Aggressive Company Shares Buy Back & MD adding stakes may boost Digistar

Digistar Corporatio Berhad (DIGISTA) has been one of the best performers in Bursa Malaysia this year in terms of share price appreciation, gaining close to 300% from this year low of 12.5 sen.  Despite the share price rising a few times this year, the company has become aggressive in shares buy back recently.  In the last two weeks alone, the company has bought back close to 5 million of its own shares at prices ranging from 43.5 sen and 45.5 sen.  The company’s Managing Director Datuk Lee Wah Chong also disclosed today (30th May 2011) that he had added some 427,300 DIGISTA shares at 45.7 sen last Friday, raising his stakes to 55.6 million shares.

ASB Losing Battle to Keep Stake in Insurance Company

Advanced Synergy Berhad (ASB) appears to be giving up hope to keep its 49% equity stake in Ace Synergy Insurance Berhad (ASIB).  ASB has finally called an EGM on 6th June 2011 to seek shareholders’ approvals to approve the disposal of its 49% stake in ASIB for RM117 million.  ASB has been fighting against ACE INA International Holdings Ltd (AIIH) in courts against the latter exercising a call option to purchase ASB stake in ASIB on 4th Feb 2009.  ASB had disputed the validity of the call option arising from an Amended and Restated Shareholders Agreement between ASB and AIIH in January 2009. Although the sale may be against ASB’s wish, the proceeds from the disposal of RM117 million is about the same value as the whole market capitalization of ASB before accounting for conversion of ASB’s warrant-like ICULS (ASB-LA).

Significant Off Market Trade Revives Interest in KARYON-WA

The interest in KARYON-WA has picked up slightly after a significant off market transaction last Friday (13/5) which saw the company’s Chairman Mr. Loh Chen Yook disposing about 6 million warrants at 12 sen.  KARYON-WA closed at 8.5 sen on 13th May and its price has dipped to 7.5 sen on 18th May 2011.  At the same time, the mother share has also inched up to 24.5 sen on slightly increasing volume.

 

Why is the Chairman disposing his warrants at 50% higher than market price?  Who could have been the buyer?

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