This article first appeared in The Edge Malaysia Weekly on May 5, 2025 - May 11, 2025

BINA Puri-Warrant B is generally thinly traded, with periods of no transactions being a common occurrence. This trend persisted for most of the first quarter this year.

In late April, however, after seeing 12 consecutive sessions of inactivity, the warrants experienced a sudden surge in price to 23 sen on April 22 — a 70.4% increase from 13.5 sen in the previous session with a modest 97,100 units traded. The following day, the warrants climbed 30.4% to 30 sen, with 65,100 units changing hands.

On April 24, during the hacking incident, there was a spike in trading interest in Warrant B at 3.19pm and by 3.32pm its price had shot up to 60 sen. Warrant B remained at that level until 4.21pm, or for about 49 minutes, before retreating to 48.5 sen at the close — marking a still significant gain of 61.67%.

Note that the one-day trading volume on April 24 — totalling 41.17 million units — exceeded the total accumulated volume of 23.71 million units for the past two years since the warrants were listed on April 20, 2023.

A staggering 33.149 million units changed hands at the peak price of 60 sen, generating a turnover value of RM19.89 million. This means about 80% of the day’s total trading volume occurred at the peak level.

From an investment standpoint, this sharp price movement is irrational because the warrants are deeply out of the money. With an exercise price of 20 sen at a one-to-one ratio, the theoretical fair value of the mother share should be 80 sen — a significant premium compared to the last traded price of about 37.5 sen.

The largest holders of Warrant B are the company’s managing director and CEO Kevin Chai Chan Tong, who owns 15.116 million units (29.23%), followed by Maju Offshore Capital Sdn Bhd with 6.785 million units (13.12%) and Andy Lai Wee Young with 4.188 million units (8.09%).

Former deputy executive chairman Tan Sri Tee Hock Seng, who retired from the board on April 16, now holds 818,281 units (1.93%). Previously, he had held 5.763 million units (11.15%), but his stake shrank after he converted 4.945 million units between February and April this year — just before the warrant price surge.

His son, Datuk Matthew Tee Kai Woon, who serves as executive director, currently holds 187,866 units (0.4%) after having sold 10 million units in October 2024 and converting 63,310 warrants into shares on Feb 25.

On April 24, the trading volume of Bina Puri Holdings Bhd (KL:BPURI) shares surged alongside that of Warrant B, while the stock price repeatedly hit the day’s high of 40 sen, marking a 15.9% gain. About one-third of the day’s transactions took place at between 37 sen and 38 sen, resulting in a volume-weighted average price of 36.44 sen for the day.

The stock ultimately closed at 37.5 sen, up 8.7%, with a remarkable total volume of 103.68 million shares — nearly 10 times higher than its one-year average. The turnover for the day was RM37.78 million.

Interestingly, on Nov 19 last year, Bina Puri placed out 131.136 million shares, representing 16.27% of its enlarged share base, to undisclosed investors at 29.2 sen per share, raising about RM38.29 million in gross proceeds.

The stock saw quiet trading for the next three months, with daily trading volume rarely exceeding five million units and its price bottoming out at roughly 26.5 sen. By mid-March, trading interest picked up, driving daily volume to above 15 million and gradually strengthening the share price to 34.5 sen.

Following the placement, Chai remains the company’s largest shareholder, holding 166.5 million shares (20.53% stake). This is followed by Matthew with 59.99 million shares (7.03%) and his father with 12.45 million shares (1.54%). Alipay Loan Services (M) Sdn Bhd holds 24.85 million shares (3.06%) and Dr Tan Cheng Kiat 19.26 million shares (2.38%).

Collectively, Matthew and his father now own 8.56% of the company, down from 14.31%, following both placement dilution and their sale of 12.975 million shares in March and April.

Note that Matthew sold a million shares at 34.09 sen apiece on April 23, followed by a million more at 34 sen a day later.

Chai first emerged as a substantial shareholder in Bina Puri in December 2022, acquiring 20.38% through a private placement and open market purchases.

As at April 30, Bina Puri’s shares had retreated to 25.5 sen, while its warrant had declined to 18.5 sen. Trading volume had also contracted significantly.

The spike in the trading volume and price of Bina Puri shares, along with that of Warrant B, has raised concerns among certain quarters as to why Bursa Malaysia did not issue an unusual market activity (UMA) query.

In fact, Bina Puri voluntarily submitted a filing with Bursa titled “Clarification on Unusual Trading Activity” the day after the hacking incident on April 25. In the filing, the company expressed its willingness to fully cooperate with the relevant authorities, including the Securities Commission Malaysia and Bursa, by providing any necessary information or assistance for their investigation.

It further assured stakeholders that the personal accounts and shareholding of key shareholders and owners remained secure and had not been accessed without authorisation. In addition, the board of directors reaffirmed its commitment to transparency and the protection of investor interests.

Nevertheless, a market watcher notes that the surge in Bina Puri’s shares by as much as 15.9% a day did not necessarily justify an UMA query. On the other hand, Warrant B, whose price spiked 100% and remained at its peak for almost 50 minutes, should have sparked curiosity about the underlying factors leading to the pickup in trading activity. Based on his past observations, the market watcher says UMA queries are rarely issued for warrants. They typically apply to mother shares and their corresponding warrants together.

Asked why there was no UMA query issued for the spike in the trading of Bina Puri-Warrant B, Bursa says: “While BPURI-WB reached its highest single-day volume since issuance, UMA assessments consider multiple factors beyond just volume. We are unable to further comment nor disclose our internal criteria and the parameters for UMA due to regulatory and market integrity considerations.”

Typically, based on the regulator’s previous responses to instances of high volume of share trades in the past that were reported in the press, Bursa had stated that an UMA query was issued only when the price movement and/or trading volume of a particular stock was deemed significant and unusual or unexplained after considering various factors.

The issuance of an UMA query is an operational decision made by the exchange’s surveillance unit based on clear internal guidelines and parameters that have undergone a stringent approval process. These guidelines assess factors such as corporate announcements preceding the UMA, market developments affecting the listed company, industry trends and market sentiment.

The UMA requirement has been part of Bursa’s Listing Requirements since the 1980s, serving as a prescribed disclosure obligation for listed companies. It plays a vital role in appraising the market and facilitating informed investment decisions.

Broadly, UMA queries and responses from listed companies are designed to assist investors in making informed trading decisions. They form part of the continuing disclosures of listed companies, complementing periodic reports such as financial statements. 

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