More time needed for big firms to sell stocks

These companies may have to refer to SC’s SAC for further action

by FAR AISYAH / pic by TMR filepic

Some of the securities of big companies that were excluded from the updated Shariah-compliant list by Securities Commission Malaysia (SC) may need more time to dispose of their stocks or to be included again on the list.

An analyst who spoke under the condition of anonymity said these companies may have to be referred to SC’s Shariah Advisory Council (SAC) for further action.

“Some of these big companies might need to go back to the Shariah committee once they get delisted, to discuss whether to dispose of their stocks or wait — depending on the circumstances they might face.

“The Shariah committee might look into the consequences to decide whether these companies need to dispose of their stocks immediately or to give them more time,” the source said.

However, the source also said it all depends on SAC’s approvals on the matter.

Last Friday, 22 securities were excluded from the updated Shariah-compliant list approved by the SAC.

The companies affected are AE Multi Holdings Bhd, BCM Alliance Bhd, Bertam Alliance Bhd, BTM Resources Bhd, Careplus Group Bhd, Dancomech Holdings Bhd, DiGi.Com Bhd, Eden Inc Bhd, Eversendai Corp Bhd, Global Oriental Bhd, Gunung Capital Bhd, HCK Capital Group Bhd, Heng Huat Resources Group Bhd, Jiankun International Bhd, Kim Loong Resources Bhd, Malaysian Bulk Carriers Bhd, PUC Bhd, SEG International Bhd, Sona

Petroleum Bhd, Techfast Holdings Bhd, Tiong Nam Logistics Holdings Bhd and Wintoni Group Bhd.

The SAC also advises investors who invest based on Shariah principles to dispose of any Shariah non-compliant securities which they presently hold, within a month of knowing the status of the securities.

DiGi’s share price fell by 26 sen to RM4.41 following the SC announcement, erasing approximately RM2.02 billion from its market capitalisation last week.

DiGi had reaffirmed its commitment to manage its total conventional debt over total assets within the 33% Shariah threshold. Following the establishment of its sukuk programmes in the second quarter of 2017, DiGi has regularised its total conventional debt over total assets to 30%.

The counter since then recovered on Monday by 18 sen to close at RM4.59.

Meanwhile, Kim Loong Resources’ share price dropped by 15 sen to RM4.19, losing around RM46.68 million of its market capitalisation.

The plantation company’s counter improved on Monday by one sen and closed at RM4.20.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said a complete recovery for these counters may take some time as it will exclude a number of funds from the companies’ stocks.

“Once you got excluded, a subset portion of potential investors who are willing to buy your stocks will also be excluded.

“Once demand for the stocks reduced, the stock price will be permanently affected. The recovery might take some time but even so, the price will not be as high as it was previously,” Pong told The Malaysian Reserve.