This article first appeared in The Edge Financial Daily on December 7, 2017

Red Sena Bhd (+ve)
SHARES in Red Sena Bhd (fundamental: N/A; valuation: N/A), which triggered our momentum algorithm yesterday for the first time this year, closed up 0.5 sen or 1.09% at 46.5 sen, with a market capitalisation of RM465 million.

A total of 13.62 million shares were done, versus its 200-day average trading volume of 1.08 million shares. Red Sena is a special purpose acquisition company that is focused on acquiring operating companies or assets in the processed food and beverage (F&B) industry, particularly branded, packaged F&B products, known as qualifying acquisition (QA).

The company, listed on Dec 10, 2015, has until Dec 10, 2018 to secure a QA.

In its fourth financial quarter ended Sept 30, 2017 (4QFY17), Red Sena widened its losses by 4.6% year-on-year to RM3.78 million from RM3.62 million. Without a QA, it has yet to generate any revenue. Instead, the company’s income was mainly derived from investment income from Islamic Murabahah deposits under its cash trust account of RM7.27 million.

For the full FY17, it posted a net loss of RM7.62 million compared with RM6.86 million in FY16, on higher amortisation charge of public issue cost during the year.

The company also said it has narrowed its list of potential QA candidates to only a handful during the past six months, and that 1QFY18 will be the last practicable window to sign a conditional sale and purchase agreement, in view of the approval process it would have to go through.