Hot Stocks Gamuda warrants rise on investor buy-back

by **Cals** Thu 28 Mar 2013, 14:24

Hot Stocks Gamuda warrants rise on investor buy-back
Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Thursday, 28 March 2013 12:55

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KUALA LUMPUR (Mar 28): GAMUDA BHD []’s warrants rose, possibly on the back of investors wanting to buy back government-linked companies (GLCs) that were previously heavily sold down.

Yesterday, Gamuda rose 15 sen or 3.75% to end at RM4.14 in active trades after a JP Morgan report cited it as one of its top picks. Prior to this, Gamuda had been left out of foreign radar for some time.

At 12.10 pm, Gamuda-WD was trading at RM1.32, up 4 sen or 3.1%, after previously hitting a high of RM1.34. Some eight million shares changed hands, putting the counter on the top actives.

Gamuda-C3 was trading at a high of 23 sen, up 12 sen or 109.1%, on a volume of 20,000 units, placing it on the top gainers list across the exchange.

However, at 12.15 pm, Gamuda’s shares were down 1 sen or 0.2% to RM4.13. It hit a high of RM4.19 earlier, on a volume of 6.4 million shares.

A bank-backed analyst told theedgemalaysia.com that Gamuda’s warrants run-up could be an effect of investors wanting to adjust their risk premium.

When retail investors miss opportunities buying the mother share, they may buy warrants as a cheaper way of getting into the stock.

“I don’t think the run-up has that much to do with JP Morgan’s recommendation. The market had been oversold, so now investors are possibly buying back into these GLC’s, realising that they’ve underinvested.

“Of course, now there is also the possibility that the dissolution (of Parliament) announcement could happen today… But we think this is only going in another month or so, so people are going to have to manage their money for the next one month,” he added.

Early this week, JP Morgan released a report which it upgraded Malaysia equities to “overweight”, telling investors now was the time to buy into some stocks it saw benefiting from the country’s growth.

Gamuda was one of those picks out of a list of nine.