KUALA LUMPUR (March 20): Shares in Media Chinese International Ltd continued to climb 5.5 sen or 12.79% this morning to a five-month high of 48.5 sen, tracking gains of its Hong Kong-listed counterpart days after the latter’s soon-to-be-listed arm was heavily oversubscribed.

The counter was the most actively traded stock on Bursa Malaysia with over 1.02 million shares exchanged as at 9.42am.

However, Kenanga IB Research downgraded the stock to underperform while maintaining a target price of 35 sen as it warned that arbitrage opportunity could diminish rapidly should trading sentiment change.

“One should note that the share transfer from Bursa Securities to the Hong Kong Stock Exchange is subject to stamp duty and share registration, which could take weeks. The arbitrage opportunity may potentially diminish by then given the high trading volatility in HKEX,” Kenanga analyst Cheow Ming Liang wrote in a note today.

Despite a lack of key earnings catalysts and a challenging advertising expenditure outlook, Cheow recommended that investors ride with the trend and sell-on-strength of the stock.

Shares in the Hong Kong-listed Media Chinese International gained 21 cents or 7.81% to trade at a four-year high of HKD2.89 today. The counter has gained HKD2.18 or over 300% from just 72 cents on March 14.

Its 10%-owned Most Kwai Chung, which is slated for listing on March 28, has been oversubscribed by 2,790 times for its retail tranche, reportedly securing 22.6 billion Hong Kong dollars for its initial public offering, Kenanga pointed out.