IFCA falls 9% on larger share base, ACE decline

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KUALA LUMPUR (June 12): IFCA MSC Bhd fell as much as 9%, tracking a decline in the broader Bursa Malaysia ACE Market.  

IT software specialist IFCA (fundamental: 3; valuation: 0.8) has also fallen following announcement of an expanded issued share base. This includes additional shares from the conversion of the company's warrants.

IFCA fell as much as 11 sen to RM1.10 before reducing losses. At 12.30pm, the stock settled at RM1.16 with some 25 million shares traded to become the second most-active counter on the bourse.

The FBM ACE declined 68.07 points or 1.07% to settle at 6,297.84. For comparison, the FBM KLCI added 2.26 points or 0.1% to 1,737.02.

According to Inter-Pacific Securities Sdn Bhd remisier Sam Ng, IFCA may have been down due to profit taking across the ACE Market that sparked a chain reaction.

“This is purely for trading purpose. But it is worth noting that the ACE Market was down today as there seems to be profit taking activities happening in the ACE Market,” Ng told theedgemarkets.com over the telephone today.

IFCA shareholders could also have taken the cue from the company's larger issued share base which would dilute earnings per share.

In an announcement last Tuesday (June 9), IFCA announced that 2.63 million new shares were issued following conversion of the company's warrants. Including the new shares, which were listed yesterday (June 11), IFCA's issued base had expanded to 554.7 million shares.

(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.)