KUALA LUMPUR (March 7): Uncertainty over Genetec Technology Bhd’s future direction following its plan to consolidate 10 shares to one, has resulted in heavy selling causing the stock’s price to plummet 16.13% in the morning trade.

At 11.51am, the counter slipped 2.5 sen to 13 sen, with 33.2 million shares traded for market capitalisation of RM45.7 million. Year-to-date, its share price has reduced by 54.39%

The high sale of shares is causing a potential margin call, as the share price has fallen sharply, said Interpacific Securities remisier Sam Ng.

He told theedgemarkets.com that shareholders were probably uncertain of the company’s future, which has prompted the sale of shares.

Ng said companies do not usually consolidate shares and would instead reduce the par value of the stock, which made it more attractive.

He felt this is probably a reason why retail shareholders were doubtful of the move by Genetec.

Last Friday (March 4), Genetec, a contract manufacturer of automated industrial equipment, systems and production tools, made the proposal to reduce fluctuation in its share price.

It said the move to consolidate shares also encouraged investors to view it as a long-term investment, rather than a "penny stock" prone to speculative pressures.

Genetec said its issued and paid-up share capital as at Feb 25, 2016 was RM35.17 million, comprising 351.73 million existing shares.

The group was also in the midst of implementing a special issue of up to 21.68 million new existing shares that represent 6.16% of its existing issued and paid-up share capital to Bumiputera investors, approved by the government.