Off-Market Trades: Perduren, Top Glove Corp, Lee Swee Kiat, Jiankun International and Global Oriental

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A total of 490.79 million securities worth RM563.63 million were traded off market in blocks of at least 400,000 units from Dec 3 to 9. During the period, the FBM KLCI declined 1.14% and saw languid trading activity off market, with only relatively small stakes changing hands.

One exception was Datuk Kamaluddin Abdullah’s offer to take over Perduren (M) Bhd, involving 93.5 million shares or a 69.3% stake in the property investment holding company.

Kamaluddin, son of former prime minister Tun Abdullah Ahmad Badawi, jointly acquired those shares with former president and CEO of Daya Materials Bhd, Datuk Mazlin Md Junid, and former executive director of Masterskill Education Group Bhd, Siva Kumar M Jeyapalan. TS Law Group Sdn Bhd, Perduren’s largest shareholder, was the seller.

The acquirers paid RM1.60 cash for each Perduren share or RM149.6 million in total on Dec 9. While the counter had closed 12.5% higher the day earlier, Perduren has rallied from a low of RM1.36 in November.

Kamaluddin, Mazlin and Siva Kumar, who triggered a mandatory general offer for the remaining 30.7% shares they do not own, intend to keep Perduren’s listing status.

Meanwhile, some 10.24 million shares or a 1.65% stake in Top Glove Corp Bhd changed hands in direct trades at RM4.76 apiece or RM48.72 million in total on Dec 4. The stock closed at RM4.76 on the same day.

While filings show some selling activities by the Employees Provident Fund, its stake in the rubber glove producer had actually increased 48 basis points since November to 6.83% as at Dec 10.

Top Glove is set to release its financial results for the first quarter ended Nov 30, 2014 (1QFY2015), on Tuesday. Over the past nine months, its shares have fallen 19.52% to RM4.66, as its net profit for FY2014 dipped 8.13% to RM180.52 million on lower average selling prices of gloves.

At the time of writing, Bloomberg data showed only four out of 21 analysts advocating buying Top Glove, with most having “hold” calls. The target prices range from RM4 to RM5.25, averaging at RM4.79.

Over at Lee Swee Kiat Group Bhd (LSK), three million shares or 1.79% equity interest changed hands off market at 16.5 sen apiece on Dec 4. The transacted price was 3.13% higher than the day’s closing price.

The purchaser could be the mattress producer’s founder and non-executive chairman Lee Ah Bah @ Lee Swee Kiat. A filing with the stock exchange shows that Lee bought 3.12 million shares — via Lee Swee Kiat & Sons Sdn Bhd — at the same price and date as the off-market transaction. The purchase raises the investment vehicle’s stake in LSK to 46.66% from 44.79% on May 2.

LSK’s net profit for the nine months ended Sept 30, 2014, almost doubled to RM2.2 million from RM1.16 million in the previous corresponding period, as raw material costs and foreign exchange rates dropped in its favour. Revenue also improved by 15.78% to RM52.85 million.

The maker of Napure mattress said in its latest explanatory notes that the changes in the US dollar may have a direct impact on its performance, given that the greenback is the main foreign currency for LSK’s export business. The recent decline in oil prices has caused the ringgit to fall to a five-year low range of 3.500, which means US dollar earnings would look larger when translated into ringgit terms.

Elsewhere, property developers Jiankun International Bhd (formerly known as Nagamas International Bhd) and Global Oriental Bhd each saw the trading of their renounceable rights on Dec 3. Those rights ceased trading last Wednesday, even as Jiankun’s counter closed 2.5 sen higher at 26 sen while Global Oriental’s ended three sen higher at 58.5 sen.

The two companies’ rights shares saw notable off-market transactions. Jiankun’s 19.48 million warrant-sweetened two-for-one rights shares, traded between Dec 3 and 5, made up 38.28% of its pre-rights shares issued share base. Global Oriental, meanwhile, saw 28.18 million rights shares change hands on the same dates — equivalent to 12.4% of its issued share base prior to the two-for-two rights issue that comes with one free warrant for every two shares.


This article first appeared in The Edge Malaysia Weekly, on December 15-21, 2014.