This article first appeared in The Edge Malaysia Weekly on August 26, 2024 - September 1, 2024

In the last two weeks, the total volume of shares traded in Cape EMS Bhd (KL:CEB) amounted to almost 2.7 billion, close to three times its issued share base of 992 million.

The stakes of its major shareholders — sisters Christina Tee Kim Chin and Tee Kim Yok — have been sold down significantly. Christina, who held 38% on March 29, now has an 11.27% stake.

As for Kim Yok, her current stake is about 1%, reduced substantially from 6% in March. Christina is group CEO and managing director, and Kim Yok is an executive director.

The Employees Provident Fund bought 3.5 million shares on July 26 after the share price dropped to 71 sen from RM1 and raised its shareholding to 5.04%. Three weeks later, on Aug 15, the fund sold six million shares when the share price fell to 43 sen, trimming its stake to 4.44%.

Easily more than 400 million shares, which make up more than 40% of the company, have changed hands through open market sales. But what is puzzling is that there has been no announcement so far on the emergence of a major shareholder.

So, who purchased the shares from the open market? Were these acquired by individuals or was it orchestrated buying by groups of individuals working together?

Cape EMS is not the only company that has seen a significant turnover in its shares, but without the emergence of a new shareholder.

Early this year, YNH Property Bhd also saw a heavy selldown of its shares. The volume transacted on the open market was several times over its issued shares. Until today, however, no new shareholder has emerged.

In the latest quarter, Cape EMS recorded a profit of RM8.7 million, which is half of that recorded in the corresponding period last year. The lower profit came in despite higher revenue, suggesting there was compression in margins in its business.

The business may see margins narrowing but the stock certainly does not lack interest, as it continues to trade amid heavy volume.

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