Malakoff’s share price falls further on persistent selling

by **Cals** Thu 21 May 2015, 22:35

Malakoff’s share price falls further on persistent selling

KUALA LUMPUR: Malakoff Corp Bhd’s share price slid further yesterday as selling pressure on the independent power producer (IPP) persisted. The stock fell as much as 7.4% to an intraday low of RM1.63 yesterday despite several stabilisation attempts by Maybank Investment Bank Bhd.
It regained some lost ground in the late afternoon session to close at RM1.72, down four sen or 2.2%. It was the most actively traded stock on Bursa Malaysia with 113.46 million shares changing hands.
Fund managers said Malakoff’s share price might be under pressure as Maybank is expected to exhaust its quota to mop up shares to stem any sharp fall. It is said that Maybank had already utilised a large portion of its quota.
InterPacific Research head of research Pong Teng Siew believes the selling pressure heaped on Malakoff has not bottomed out yet. “There is panic selling as investors are quickly dumping Malakoff shares,” he told The Edge Financial Daily over the telephone. He said the situation may be compounded as institutional investors are not accumulating shares in the IPP due to its failure to trade at a premium to its IPO price.
“Occasionally, this happens (share price underperforming after the debut). I believe there are too many investors having a slice of the investment cake.”
Pong noted Malakoff’s stabilising manager Maybank had provided buying liquidity, but acknowledged that it had so far not achieved the desired outcome.
The investment bank had accumulated 154.5 million shares in Malakoff worth a combined RM275.83 million as at yesterday.
Despite the selling pressure, an M&A Securities analyst stressed that 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 said M&A still maintains its “buy” rating for the stock with its target price intact at RM2.30.

This article first appeared in The Edge Financial Daily, on May 21, 2015.