Thursday 28 Mar 2024
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KUALA LUMPUR (June 17): Central Global Bhd (CGB)’s share price took a dive this morning.

The stock started the day on a firm note, hitting a high of RM2.60 shortly after the opening bell, up 13 sen or 5.26%. 

But the buying momentum did not last. As at 11.15am, its share price fell 13 sen or 5.26% to RM2.34 with 21.3 million shares changing hands. The trading volume is equivalent to 23% of its issued share capital of 91 million shares.  

Nonetheless, the little known CGB, which has been in the red in the past three years, is one of the outstanding star performers among the penny stocks, in terms of share price.

The company has been in the news of late. Earlier this month, it announced it has signed a memorandum of understanding (MoU) to explore the potential of forming a partnership for a sewage treatment project.

On top of that, the company is also exploring the potential of partnering with a China-based firm to build a database centre in Malaysia. But CGB has yet to sign any MoU on that. 

Prior to the news, CGB’s share price has already been on the climb. The stock has more than tripled since the beginning of the year. The stock has risen by 286% from 65 sen in early January. 

In April, the stock exchange granted CGB the approval on its private placement of 18 million new shares. The company has fixed the first tranche of placement of one million shares at RM2 per share. 

This block of shares was listed on Bursa Malaysia on June 9, the same day that CGB announced the signing of the MoU with Multi Scopes Sdn Bhd to explore a partnership over a sewage treatment plant in Selangor.

According to CGB, the collaboration would involve the engineering, procurement, construction, commissioning, operation and handover of the Employees Provident Fund’s wholly-owned subsidiary Kwasa Land Sdn Bhd’s sewage treatment plant in Petaling Jaya.

Both parties have yet to secure the project, based on a filing to the stock exchange.

As the news continues, on June 15, the manufacturing and construction company has clarified information published in several news journals in China regarding a strategic partnership/MoU between the company and/or its subsidiary, CIC Construction Sdn Bhd, and Huobi Mall to build a global database collection centre in Malaysia as inaccurate.  

“We are indeed in discussion with Huobi Mall on the possibility of collaborating on the construction of a proposed database collection centre in Malaysia.

“However, we are still in the midst of evaluating the viability of the aforesaid project and have yet to sign a MoU or any other forms of agreement with Huobi Mall in this regard. 

“We will make further announcements as and when there are any significant developments on this matter,” said CGB executive chairman Datuk Faisal Zelman in a statement issued earlier. 

In terms of financial performance, the company’s net loss widened to RM2.29 million from RM610,000 in the previous year. Over the last three years, the company has been in the red, its payables soared to RM33.32 million as at Dec 31, 2020. 

In May, the company announced that Messrs KPMG PLT had indicated that it is not seeking re-appointment at the forthcoming second annual general meeting on June 22. The board is recommending Messrs Baker Tilly Monteiro Heng PLT to be appointed as the auditor of the company. 

Edited ByKathy Fong
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