Monday 27 May 2024
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KUALA LUMPUR: Within one week, Singapore-listed Asiasons Capital Ltd, Blumont Group Ltd and LionGold Corp Ltd have collectively lost S$9.724 billion (RM24.83 billion) in market capitalisation and are now reduced to penny stocks.

All three stocks that have Malaysians as controlling shareholders resumed trading yesterday, following their suspension last Friday.

However, the stocks were designated by the Singapore Exchange (SGX), causing them to plummet from their closing prices last Friday.

Asiasons lost 85.58% in its value to close at 15 Singapore cents, while Blumont shed 85.23% to close at 13 cents yesterday. LionGold, which closed at 87.5 cents last Friday, declined by 71.43% yesterday to end at 25 cents.

A major shareholder of Asiasons attributed the fall in the stocks to traders speculating about their future plans and precipitated by developments surrounding them last Friday and Sunday.

“The traders speculated on what our future plans are and this has created more concerns in the market,” Datuk Jared Lim told The Edge Financial Daily.

“The share prices are not a reflection of the companies’ fundamentals,” he said adding that the cascading effect would take some time to stabilise.

“We are still going about to build our businesses,” Lim said.

Asiasons is controlled by Datuk Mohamed Azlan Hashim and Lim. Azlan holds a direct shareholding of 14.7% or 37 million shares. The duo hold an indirect stake of 38.4% or 376 million shares through Asiasons Investment Managers Inc.

Asiasons has an 8.72% stake in LionGold whose other substantial shareholders include Datuk Md Wira Dani, son of former finance minister Tun Daim Zainuddin, with 6.35%.

Blumont is controlled by Neo Kim Hock, who has 14.3%, while the second largest shareholder is Clear Water Development Sdn Bhd with 10.62%. Clear Water is controlled by Datin Dian Lee, Lim’s wife.

All three stocks have exposure to the mining sector and soared to euphoric valuations in recent weeks on investments in oil and gas, gold and coal segments.

Asiasons, an investment holding company, reached an all-time high of S$2.83 on Oct 1, while Blumont closed at S$2.45 on Sept 30. LionGold went as high as S$1.77 on Aug 29.

A remisier from a Singapore brokerage firm told The Edge Financial Daily yesterday that the rally in the share price may not be for real.

“Share prices have to be supported by earnings so that there are no hiccups in upgrading the businesses,” he said over the phone.

The remisier said there were no brokerage reports to justify the fall in the counters.

Due to the recent sell-down on the three counters, the auditors appointed would have to analyse and check (the companies’ reports) thoroughly because investors are relying heavily on these reports, he said.

According to the remisier, investors will now start looking at the latest results of these companies before deciding on the next course of action.

“Right now, we still can’t tell if anything has gone bad. The exchange in suspending and later designating the stocks is trying to protect the investors and the integrity of the market,” he said.

The remisier said it is better the bubbles burst earlier than later because they [the investors] will see bigger losses if this happens later.

In lifting the suspension but designating the counters on Sunday, the SGX said the sale of the securities is prohibited unless the seller has the designated securities to be sold.

The purchase of the shares is not allowed unless the buyer makes cash payment during the execution of the order, said SGX.

Just 50 minutes after the market opened last Friday, Blumont  plunged 56.44% to 88 Singapore cents while Asiasons and LionGold crashed by 61.48% and 42.05% to S$1.04 and 87.5 cents, respectively. As a result, SGX suspended the trading in the shares.

Securities Investors Association (Singapore) or SIAS called for a speedy investigation into Blumont Group on Oct 1.

SIAS said in a note that the unusual rise in Blumont’s share price from 30 Singapore cents on Jan 2 to S$2.45 on Sept 30, an eight-fold increase just over nine months from January this year, showed serious concerns for Blumont investors.

“We hope there is an acceptable explanation by the company. If not, SIAS will call on the relevant authorities to investigate this unusual stock activity immediately and let all stakeholders know the reasons for the unusual share price hike,” SIAS said in an announcement on its website.

This article first appeared in The Edge Financial Daily, on October 8, 2013.


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