UMA-hit counters add RM5.3b to market cap

A total of 16 counters have received UMA notices from Bursa Malaysia Securities YTD


STOCKS slapped with unusual market activity (UMA) queries by Bursa Malaysia Securities Bhd added over RM5.3 billion to their valuation at the height of the surge in their prices this year, though many have pulled back in recent weeks as investors continued to cash in on gains.

Analysts said the UMA acts like a spotlight and sometimes does help cool price action in the counters and sometimes not.

Despite the significant number of UMAs, a Bursa Malaysia spokesperson told The Malaysian Reserve that trading in the marketplace remains “fair and orderly” as the stock exchange continues to enhance the timeliness of its detection of irregular, manipulative or insider trading activities.

“The exchange continues to engage listed issuers and, where necessary, requires them to provide additional information or disclosure to facilitate informed investment decisions by investors and shareholders,” the spokesperson said.

Where there are breaches to the Listing Rules, the exchange will embark on further investigation and enforcement actions.

The spokesperson added that the exchange has established processes to detect insider trading arising from material developments or announcements.

“Where facts warrant, we will escalate possible insider trading cases to the Securities Commission Malaysia for further investigation and enforcement action,” the spokesperson said.

Bourse filings showed a total of 16 counters have received UMA notices from Bursa Malaysia Securities year-to-date (YTD) after their share price multiplied by nearly 20 times since Jan 4.

Data compiled by Bloomberg found 12 counters trading below RM1 at the start of the year before brisk trading of penny stocks in the January-March period saw at least 10 counters climbing to an average 52-week high of RM1.86.

The biggest price jump was in Dataprep Holdings Bhd’s shares, which soared over 1,759% to a 52-week high of RM3.16 last Friday from 17 sen on Jan 4, pushing the counter to reap nearly RM1.95 billion in market value in the last two months.

Bursa Malaysia has since advised investors to exercise caution and make informed decisions in trading in the IT company’s shares.

Dataprep had earlier responded to the exchange’s UMA query by saying it was unaware of any corporate development that could give rise to the unusual trading activities in its shares.

The company last Friday announced that its wholly-owned subsidiary, Dataprep (Malaysia) Sdn Bhd, had entered into a partnership deal with Asia Coding Centre Sdn Bhd to provide an integrated solution technology for Covid-19 screening to the Health Ministry.

The duration of the memorandum of collaboration is three years. Dataprep’s share price rally began in mid-February after the company announced plans to acquire a 51% stake in Ridaa Associates Sdn Bhd, aimed at expanding the group’s multimedia and communication revenue stream.

The group, in its third-quarter ended June 30, 2020 financial report, stated that the acquisition will allow the group to pursue opportunities to build, instal, operate, maintain and manage telecommunication tower assets in Malaysia.

In addition to its takeover plan, Dataprep’s share price has also been boosted by developments linked to Widad Business Group Sdn Bhd (WBG). WBG is owned by Tan Sri Muhammad Ikmal Opat Abdullah, who is also a substantial holder of Dataprep.

Muhammad Ikmal has been trading his Dataprep shares since February, selling some 11.11 million shares in an off-market deal on Feb 16 before acquiring 200,000 shares via open market on March 1, which took his stake to 54.21%.

He has also been actively trading his shares in Widad Group Bhd with the acquisition of some 366.96 million shares and disposal of 420.16 million shares, giving him a 59.07% stake in the group.

Other big gainers among UMA- hit counters include Euro Holdings Bhd, MPHB Capital Bhd, Genetec Technology Bhd and Artroniq Bhd.

Euro Holding’s 68% stock price increase has lifted its market capitalisation to RM4.62 billion from RM2.74 billion, while Artroniq’s 40% share price rise this year has seen its valuation more than double to RM312.01 million from RM145.91 million.

By volume of shares traded, Dataprep leads with a 30-day average volume of 70.12 million, followed by Artroniq (16.79 million), Xian Leng Holdings Bhd (6.62 million), Euro Holdings (3.51 million) and BSL Corp Bhd (2.74 million).

All 16 companies have since responded to their respective UMA queries by saying they were unaware of any development that had not been previously announced that may account for the sharp rise in their share price and volume.