Hot Stock Malakoff falls 7.4% despite stabilisation attempts by Maybank IB

by **Cals** Wed 20 May 2015, 19:16

Hot Stock
Malakoff falls 7.4% despite stabilisation attempts by Maybank IB

KUALA LUMPUR (May 20): [size=14]Malakoff Corp Bhd once fell as much as 7.4% to an intra-day low of RM1.63 today despite several stabilisation attempts by Maybank Investment Bank Bhd to fend off selling pressure.
At 3.32 pm today, Malakoff declined 7 sen or 4% to RM1.69. It is the third most active counter, after AirAsia X Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)’s ordinary rights and Kanger Bhd ([You must be registered and logged in to see this image.] Financial Dashboard). Some 78 million Malakoff shares changed hands so far.
As compared to its initial public offer (IPO) price of RM1.80, Malakoff has lost 6.1% in value, RM549 million of its market capitalisation has been wiped out since it was relisted on Bursa Malaysia last Friday.
InterPacific Research’s head of research Pong Teng Siew believes the selling pressure heaped on Malakoff has not bottomed off yet.
“There is panic selling as investors are quickly dumping Malakoff shares,” he told theedgemarkets.com over the telephone.
According to Pong, the situation may be further compounded as institutional investors are not accumulating shares of the independent power producer due to its failure to trade at a premium above IPO price.
“Occasionally, this happens (share price underperforming after debut). I believe there are too many investors having a slice of the investment cake,” he said.
Pong noted Malakoff’s stabilising manager Maybank IB has provided buying liquidity, but acknowledged that it has so far not achieved the desired outcome.
The investment bank has accumulated 154.5 million shares in Malakoff worth a combined RM275.83 million as of yesterday.
Despite the selling pressure, an M&A Securities analyst stressed Malakoff’s fundamentals are still intact given its robust business model.
“There should not be any problems, unless there is an unforeseen shutdown in its power plants,” he said.
He added M&A still maintained its “buy” rating for the stock with target price intact at RM2.30.[/size]