Hot Stock OKA rises 9.4% after share split announcement

by **Cals** Mon 10 Mar 2014, 19:30

Hot Stock OKA rises 9.4% after share split announcement

Business & Markets 2014

Written by Jonathan Gan of theedgemalaysia.com

Monday, 10 March 2014 14:09

KUALA LUMPUR (Mar 10): OKA Corporation Bhd wriggled to the top gainers’ list today after it announced a one-into-two share split last Friday.

By midday break today, the stock had risen 13 sen or 9.4% to RM1.51 with some 1.3 million shares traded.

Share split often attracts speculative play because investors believe that after the split, the lower share price will rise on higher liquidity. This had happened in the past for many stocks.

In its announcement last Friday, the precast concrete products manufacturer had proposed a subdivision into two shares for every share held by entitled shareholders.

“The company proposes to undertake the proposed subdivision of each existing ordinary share of RM1.00 each in OKA held by the entitled shareholders of OKA into two (2) ordinary shares of RM0.50 each in OKA on an entitlement date to be determined and announced later,” the statement read.

OKA is controlled by its group managing director Ong Koon Ann, who holds 48.9% stake in the company.

But in addition, OKA also enjoys fundamentals.

RHB Retail Research has recommended a “buy” rating on the stock, with an unchanged target price of RM1.95.

Analyst Chaw Sook Ting of RHB Retail Research commented: “We believe that the outlook of the construction sector will remain strong, underpinned by an extended upcycle driven largely by the RM73 billion Klang Valley Mass Rapid Transit (MRT) project.”

“We expect a 3-year CAGR growth of 44.8% in net earnings for FY13-15F. We maintain our BUY call on OKA with an unchanged FV of MYR1.95 (post-share split target price: MYR0.97),” she said.