Ibraco's shareholders approve rights issue; shares fall

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KUALA LUMPUR (July 16): Ibraco Bhd's shareholders had today approved the property developer's rights issue of 50.65 million new shares.

In a filing with Bursa Malaysia today, Ibraco (fundamental: 1.9, valuation: 2.4) said it had obtained the approval at the company's extraordinary general meeting in Kuching, Sarawak.

Ibraco's rights issue is on the basis of two rights shares for every five existing units held in the company.

The ex-date for the exercise is this Wednesday (July 22).

Today, news on the approval had not augured well for Ibraco shares, as the rights units will expand the company's issued base.

An expanded share base will dilute earnings per share.

At 12:30pm, Ibraco shares fell 11 sen or 5% to settle at RM2.21, for a market capitalisation of RM279.9 million. The stock become the seventh-largest decliner on Bursa Malaysia.

Ibraco shares had risen 28% this year, surpassing the FBM KLCI's 2% decline.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)