FGV’s share price now at RM1


Shares of FGV Holdings Bhd slumped yesterday at the close to become a penny stock as the market anxiously awaits the company’s third-quarter financial results due today and its prospects.

Shares of the government-linked planter, which had plunged to an all-time low on Monday, ended nine sen or 8.26% lower to close at a new record low of RM1 yesterday, erasing another RM330 million from its market capitalisation.

Shares of the plantation giant opened lower at RM1.08 in early trade yesterday and showed little signs of erasing the losses incurred from the previous day.

News of the legal actions against 14 of the company’s former directors have wiped out nearly RM13 billion of FGV’s market value to date since it became the world’s second-largest initial public offering (IPO) after Facebook Inc in 2012.

The share price of the planter, which is majority owned by the Federal Land Development Authority (Felda), has been on the downtrend since the end of August. It was traded around RM1.74 then before heading south.

Accusations of corruption, questionable corporate dealings, weak earnings and multiple changes in management in recent month further clouded the prospect of the palm oil producer.

When it was listed in 2012, FGV shares rushed to as high as RM5.46 or a 20% increase compared to the IPO reference price of RM4.55, making it one of the bright spots in the gloomy IPO market in Asia then.

Many initial investors in the plantation giant were global investors with Qatar Investment Authority, AIA Group Ltd, Fidelity Investments, Hong Kong-based Value Partners Group Ltd and several Malaysian state-affiliated pension funds purchasing nearly 20% of the IPO.

Many of the investors have since pared down their exposure to cut their losses.

The plantation giant’s new board and management team are trying to revive the ailing company including scrutinising questionable past dealings.