Monday, September 19, 2011

Sime Darby sees RM1.8b erased from market cap

KUALA LUMPUR: SIME DARBY BHD [] saw RM1.8 billion erased from its market capitalisation yesterday after its closed 30 sen lower to RM7.70, the lowest in 13 months on some foreign selling and also concerns about the outlook for equities.

Sime Darby was actively traded with 25.23 million shares done, falling to as low as RM7.64 earlier. The decline in its share price dragged the FBM KLCI down by 4.17 points. The 30-stock index fell 17.82 points or 1.24% to 1,413.12.

An analyst with ECM Libra Research said: "It (the selling) may be due to foreign shareholding selling and maybe the lasting effects of the E&O (Eastern & Oriental Bhd) deal.'

She noted that as of end-July, foreign shareholdings of Sime Darby shares totalled 16.6% which was not a high level.

She said the fall in Sime Darby shares was not due to the crude palm oil (CPO), which was still quite steady. The third-month CPO futures closed RM29 lower to RM3,041.

Another analyst with a bank-backed research house agreed the sell-off might be due to the ongoing investigations on E&O and its potential outcome while another reason could be due to the weak general market sentiment.

To recap, last Wednesday, the Securities Commission Malaysia (SC) said it would review all stock transactions made by all parties over the relevant period related to Sime Darby Bhd's acquisition of a 30% stake in E&O.

Sime Darby paid RM2.30 per E&O share for the block from three major shareholders - Datuk Terry Tham Ka Hon, Tan Sri Wan Azmi Wan Hamzah and GK Goh Holdings Ltd - at a price that worked out to a 60% premium to market.

Some quarters suggested Sime Darby should be forced into making a mandatory general offer for E&O as the company, together with the three shareholders who sold the 30% block, have about 41% equity interest.

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