FGV’s share price drops after removal from index

by **Cals** Mon 21 Sep 2015, 20:01

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[size=28]FGV’s share price drops after removal from index

By Chen Shaua Fui / theedgemarkets.com | September 21, 2015 : 4:39 PM MYT

KUALA LUMPUR (Sept 21): Felda Global Ventures Holdings Bhd (FGV) ([You must be registered and logged in to see this image.] Valuation: 2.00, Fundamental: 1.15) lost as much as 6 sen or 3.77% to RM1.53 after the plantation group has been removed from the Dow Jones Islamic Market Malaysia Titans 25 Index’s list of stocks in the benchmark index’s latest quarterly review.

As at 3.45pm, FGV saw 7.3 million shares changed hands.

Last Friday, i-VCAP Management Sdn Bhd, the manager of MyETF Dow Jones Islamic Market Malaysia Titans 25 ([You must be registered and logged in to see this image.]Valuation: None, Fundamental: None), said it has been informed by S&P Dow Jones Indices that FGV, UEM Sunrise Bhd (Valuation: 2.60, Fundamental: 1.50) and Supermax Corporation Bhd ( Valuation: 0.80, Fundamental: 1.00) were dropped and replaced by QL Resources Bhd ( Valuation: 1.10, Fundamental: 1.30), MyEG Services Bhd ( Valuation: 1.10, Fundamental: 2.30) and Kossan Rubber Industries Bhd ( Valuation: 0.70, Fundamental: 2.10).

Earlier this year, FGV was also dropped from the FBM KLCI 30 component stocks.

In a note to client today, MIDF Research downgraded FGV to “sell” with unchanged target price of RM1.30 due to the significant increase in share price in the absence of any material news.

The research house noted that FGV has replied to Bursa’s unusual market activity query last Tuesday and stated that “the Board acknowledges that there is no corporate development relating to FGV Group’s business that has yet to be announced”.

MIDF said: “In the absence of change in the fundamentals of the company, we maintain our target price of RM1.30 and accordingly downgrade our recommendation to ‘sell’. Our target price of RM1.30 is based on 1.0 times Price to Net Tangible Asset valuation.”

However, FGV mentioned that it “would like to inform of possible speculative reaction with regards to government announcement on special economic incentives dated Sept 14, 2015”.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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