Hot Stock Sanichi-OR falls 55% in maiden trade

by **Cals** Tue 02 Sep 2014, 20:45

Hot Stock Sanichi-OR falls 55% in maiden trade

Business & Markets 2014

Written by Chen Shaua Fui of theedgemalaysia.com

Tuesday, 02 September 2014 12:59

KUALA LUMPUR (Sept 2): Sanichi Technology Bhd rights shares (Sanichi OR) fell as much as 2.5 sen or 55% on the securities' maiden trading day.

Plastic injection mould manufacturer Sanichi's proposed rights issue involving up to 644.89 million new shares comes with 429.93million free warrants. The exercise is undertaken on the basis of three rights shares together with two warrants for every existing shares held.

At 10.43am, Sanichi OR fell three sen or 55% to 2.5sen, with some 137.3 million units changing hands. Sanichi OR, the most-actively traded entity across the bourse, settled at three sen at 12.30pm.

Meanwhile, Sanichi shares settled lower at 13.5 sen with some 30 million units done at 12.30pm. The stock had earlier fallen as much as two sen or 15% to 11.5 sen.

Remisiers said activity in Sanichi OR could be due to some big players trading Sanichi OR. The dealer, however, advised retail investors not to trade in Sanichi OR.

Goh Kay Chong, a remisier with SJ Securities, told theedge.com over the phone that many investors did not understand that OR units were not normal shares that could be traded forever. The cessation date for Sanichi OR is next Tuesday (September 9).

“It is not encouraged to trade the OR because it is short term, just about a week for you to trade, you might not be able to catch up with the price fluctuations,” Goh said.

On Sanichi shares, Goh said the stock fell because institutional investors or some big players were selling the stock while the retail investors were buying.

Sanichi shares had traded at a six-month intraday low of 6.6 sen in May this year. Last month, the stock rose sharply to a high of 16 sen last Friday (August 29).

The rise in Sanichi's share price came at a time when the group had exhibited stronger financials and announced the emergence of a new major shareholder.

Sanichi announced a RM423,000 net profit in the fourth quarter ended June 30, 2014 from a net loss of RM2.14 million a year earlier. Cumulative full-year profit increased to RM2.25 million from RM906,000, the firm told Bursa Malaysia.

Pelaburan Mara Bhd has emerged as a major shareholder in Sanichi with a 5.17% stake. Pelaburan Mara acquired the stake comprising 18 million Sanichi shares on the open market last Tuesday (August 26), according to Sanichi.