3 S'pore-listed Malaysian companies bounce back doubling share prices

PHOTO: 3 S'pore-listed Malaysian companies bounce back doubling share prices

PETALING JAYA, Malaysia - The three Singapore-listed Malaysian companies hogging the limelight of late enjoyed almost a doubling of their share prices after Singapore Exchange Ltd (SGX) lifted the trading restrictions imposed on them.

Asiasons Capital Ltd, Blumont Group Ltd and LionGold Corp Ltd rose sharply - Asiasons by 91% to 24.5 Singapore cents (63 sen), Blumont by 80% to 24 cents and LionGold by 93% to 29.5 cents, as investors jumped in to buy the stocks, although their current prices are still far off from where they were just two weeks ago prior to their free-fall.

"It could have just been a knee-jerk response to the lifting of the designation status," a dealer said, adding: "It remains to be seen what value the companies have."

Another dealer said that a fair bit of selling was still going on by some brokers in Singapore, which was possibly "force-selling activity".

Riding on this "Malaysian flavour" on the SGX yesterday were Albedo Ltd and Rowsley Ltd, which have links to Johor's Iskandar Malaysia.

Both, along with the three firms, were among the most active counters, with their stocks reaching intraday highs before most retreating slightly at the close.

Albedo and Rowsley finished the day's trading higher at 4.5 cents and 32 cents, respectively.

Recall the now infamous SGX trio of Asiasons, Blumont and LionGold had seen their shares in somewhat of a free-fall since Oct 3.

On Oct 4, the SGX suspended trading in the three firms and made them designated counters on Oct 6, with SGX officials pointing out to its rules which state that the exchange could designate a security "if, in its opinion, there has been manipulation of the security, excessive speculation in the security, or it is otherwise desirable in the interests of markets established or operated by SGX".

As "designated" counters, investors had to pay upfront for their share orders and could not indulge in any short-selling of the shares.

Reports have since questioned the basis of these companies' lofty share prices, built up since the beginning of the year.

Blumont, for example, was trading at a mere six cents a share last August. However, it hit a high of S$2.45 barely a year later, with sharp rises in recent times. Both LionGold and Asiasons have experienced the same trend.

The SGX removed the trading restrictions on the counters yesterday, but said it would continue to monitor their trading. It also advised shareholders and investors to trade with caution.

The SGX had earlier said it was investigating the possibility of the short-selling of these stocks during the designated period.

Asiason's major shareholder and managing director Datuk Jared Lim has said the price of Asiasons would reach an "equilibrium price" post-lifting of the SGX restrictions.

The company insists that its plan to buy 27.5% in US oil and gas firm Black Elk Energy Offshore Operations, which it was in the midst of seeing through prior to the saga, remained a possibility, although obviously at a revised pricing structure.

Asiasons was going to pay the bulk of the S$218mil (RM557mil) price tag via the issuance of Asiasons shares at S$1.19 each, which is a massive 385% above its current price of 24.5 cents.

LionGold said last month that it was in discussions to buy up to three gold mines, while Blumont had agreed to invest A$116mil (RM355mil) in Australian copper producer Discovery Metals Ltd.

Steel company Albedo, meanwhile, is aiming to be an Iskandar Malaysia property player via a reverse takeover deal by local tycoon Tan Sri Danny Tan. And Rowsley, controlled by Singaporean billionaire Peter Lim, already owns land in Vantage Bay, Iskandar, on which it intends to develop among others a medical complex.

Despite both companies not having any significant earnings - Rowsley is in fact loss-making - their share prices have appreciated on the prospects of an "Iskandar play". Albedo's market capitalisation stands at some S$75.2mil (RM192mil), while Rowsley's is a massive S$1.36bil (RM3.5bil).