Friday 29 Mar 2024
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KUALA LUMPUR (July 10): Shares of Mieco Chipboard Bhd extended gains today, rising to a seven-year high of RM1.01 as talk that the particle board maker may undertake a corporate exercise resumes, which propelled institutional money. 

As at 3.51pm, the stock was traded up 4 sen or 4.35% at 96 sen, with 18.63 million shares changing hands. Its market capitalisation has surged to RM212.1 million since June 29, when it was at RM140.7 million. 

It was one of the most actively traded stocks today. The counter had earlier rose as much as 9.78% to hit a seven-year high of RM1.01.

Mieco is among chipboard makers which have been enjoying the upward trend in their shares, fueled by a stronger US dollar.

A remisier said institutional funds have been buying into Mieco since June 22. 

"They accounted for about 20% of the total volume transacted every day," he told theedgemarkets.com.

The remisier sees the immediate resistance level for Mieco (valuation: 0.9; fundamental: 0.65) at RM1.46.

"Should institutional funds continue to buy into the stock, it is likely to breach the level. However, we see some profit taking activity when the stock hit a high of RM1.01," he added. 

A senior research analyst had earlier told theedgemarkets.com that there were takeover talk in the market about Mieco, which could have led to the recent rise in its share price.

However, an official from the company had dismissed the speculation, saying the share price movement was due to market forces.

For the first quarter ended March 31, 2015 (1QFY15), Mieco returned to the black with a net profit of RM3.2 million compared with a net loss of RM3.17 million a year ago. Revenue was up 6% at RM80.28 million, from RM75.75 million in 1QFY14.

(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.)

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