Shareholding change at Apex imminent?

by **Cals** Sun 02 Aug 2015, 03:22

Shareholding change at Apex imminent?

Saturday, 1 August 2015

APEX Equity Holdings Bhd has been once again cast in the limelight as its share price soared this week amid an overall weak broader market.
Rumours of shareholding changes at the company have emerged once again strongly, sending the stock up to RM1.97 intra-day on Thursday, its highest since September 2000.
On Monday, the company said its executive chairman Chan Guan Seng had given his notice to deal in the securities of the company, pending the company’s release of its second-quarter results which should be out soon.
On the same day, Apex Equity said Chan had previously informed the board that he had the intention to dispose of his shareholdings in the company, “subject to the right price.”
Currently, he has not reached any concrete agreement with any potential buyer.
Chan has a 20.27% stake in Apex Equity, of which 8.79% is a direct stake.
In January, StarBiz reported that an in-principle agreement had been reached for the sale of a substantial stake belonging to Chan, but the transaction had yet to be concluded.
The party who had reportedly offered to buy his stake then was not immediately known butsources said the price being bandied about was much higher than the net asset value of Apex Equity which stood at RM1.39 based on its latest quarterly results.
Going by previous consolidation among local brokers that have seen deals being done at about 1.1 to 1.9 times book value, a stake sale of Apex based on its current asset value could possibly be transacted between RM1.53 and RM2.64.
The single largest shareholder in Apex at the moment is Fun Sheung Development Ltd with a 15.77% direct stake, followed by Permanent Mutual Holdings Sdn Bhd with 9.75%.
Permanent Mutual is believed to be linked to Chan. Apex Equity is said to be 40%-controlled by Lim Siew Kim, the daughter of the late Tan Sri Lim Goh Tong of Genting group.
In 2012, it was reported that Siew Kim and Chan were at loggerheads, with the shareholder fight being labelled in the media as a family feud.
If Chan does sell his stake this time around, it is likely to potentially leave a vacuum as he is a key figure in the brokerage and a seasoned hand in the industry as well.
The question is who would buy Chan’s stake which is not a controlling interest.
“Also the prospective buyer has to deal with other shareholders such as Siew Kim,” says a dealer.
The stockbroking industry has seen significant consolidation over the years. It is highly regulated and competitive especially with bank-backed brokerages gaining market share with cheaper cost of financing.
Margin financing from which most brokers make the bulk of their profit is facing growing competition from conventional banks which are charging competitive rates even as they fight for market share within the banking industry.
It’s no secret that the local stockbroking business is not experiencing the best of times.
In fact, competition in the industry had become intense a few years back what with more investors and traders choosing to do their trades online thus doing away with commission for brokers.
For the first quarter to March 31, Apex Equity made a net profit of RM3.2mil on revenue of RM10.4mil