KUALA LUMPUR (Aug 16): The Employees Provident Fund (EPF) appeared to have stepped up its Genting Plantations Bhd share borrowing to raise the EPF’s stake in the company to about 14% via Bursa Malaysia's securities borrowing and lending (SBL) facility, as Genting Plantations’ share price falls to its lowest in more than nine years.

The EPF, which is Genting Plantations second largest shareholder, had raised its stake in Genting Plantations to 13.941% as at Aug 6, 2021, compared with 11.132% on Jan 4, 2021, Genting Plantations’ Bursa filings show.

As at Aug 6, 2021, the EPF held the 13.941% stake comprising 125.08 million shares in Genting Plantations, after the EPF borrowed 100 Genting Plantations shares via Bursa’s SBL facility, according to Genting Plantations' filing on Aug 12, 2021.

Prior to the Aug 6 transaction, the EPF had borrowed 83,800 shares on Aug 5 and 800 shares on Aug 2, during which the EPF’s stake in Genting Plantations stood at 13.932%, Genting Plantations' filings on Aug 5 and 11, 2021 showed.

Genting Plantations’ filings did not specify from whom the EPF borrowed the shares from and what the EPF plans to do with the borrowed shares.

At the time of writing today, the EPF had not responded to theedgemarkets.com's queries on its SBL transactions involving Genting Plantations shares.

In securities-trading terminology, SBL is synonymous with investment terms including short selling and arbitrage.  

Short selling involves the sale of borrowed securities at higher prices by the borrower, in anticipation that prices of the securities will fall. 

The borrower will subsequently buy back the securities at a lower price to make a profit, based on the prices the securities were sold and bought back.

Meanwhile, arbitrage refers to a strategy where an investor, via an immediate transaction, buys and sells the same securities which are listed on different markets.

An investor makes a profit by buying a company’s securities at a certain price on a stock exchange and sells the securities immediately at a higher price on the another bourse.

Bursa Malaysia said on its website that an approved borrower using the bourse’s SBL facility needs to inform the stock exchange regulator and operator of the purpose of the securities borrowing.

Bursa said the purposes of securities borrowing permitted under its SBL facility include settlements of regulated short sales and potential failed trades, besides settlement of a sale involving exchange traded fund-related securities by a market maker or via permitted short selling activities.

The purposes of securities borrowing permitted under Bursa’s SBL facility include the borrowers intention "to onward lend the loaned securities,” according to Bursa.

At 5pm today, Genting Plantations’ share price closed unchanged at RM6.55, giving the company a market capitalisation of about RM5.88 billion based on the group’s 897.2 million issued shares.

At RM6.55, Genting Plantations’ share price is at its lowest in more than nine years since Sept 30, 2011, when the stock finished at RM7.

Casino and hotel operator Genting Bhd is the largest shareholder in Genting Plantations with a 55.4% stake, according to Genting Bhd’s website.