KUALA LUMPUR: Masterskill Education Group Bhd, whose shares succumbed to heavy selling recently, regained some lost ground yesterday after obtaining the green light to commence operations at its Kuching campus.

Masterskill announced to Bursa Malaysia yesterday that it had been given all the necessary approvals from relevant authorities to start operations at its Kuching campus. The group, which specialises in nurses training, said it would commence full operations on Oct 1.

Masterskill’s share price rose 7.26% or 22 sen to RM3.25 yesterday, with 6.33 million shares traded. Its market capitalisation stood at RM1.33 billion as at yesterday’s close, however the closing price was still below its IPO price of RM3.50. The counter had nosedived 26% since Sept 1 to a record low of RM2.96 on Sept 23, before closing at RM3 on Sept 24.

Masterskill CEO and founder Datuk Seri Edmund Santhara attributed the sharp fall in its share price to selling by a foreign hedge fund. He had told The Edge weekly that he was unfazed by the meltdown in its share price as hedge funds were short-term investors.

He added that he would only be worried if its long-term foreign investors, like Fidelity Investments and Smallcap World Fund, decided to exit.

Santhara is the largest shareholder in Masterskill with 90.6 million shares, or a 22.1% stake, as at Sept 23. Fidelity holds 39.28 million shares (9.58% stake), while Smallcap World has 24.3 million shares (5.93%).

The certification of registration that was granted for its Kuching campus helped to stem the fall in its share price amid concerns that its earnings would be affected by the delay in starting operations at the new campus.

For 1HFY2010 ended June 30, Masterskill’s net profit rose to RM49.1 million from RM35.2 million previously. Revenue was also higher at RM154.1 million against RM126.3 million a year ago.

Despite the hiccup, Santhara said he was confident the plunge in Masterskill’s share price was just a “temporary setback”, and that continued expansions would drive future earnings growth.

This article appeared in The Edge Financial Daily, September 30, 2010.