No dabbling in Metronic, AGlobal shares
PETALING JAYA (March 23, 2012)
Several stockbroking firms have barred their proprietary day traders (PDTs), including "stockists", from dabbling in the shares of Metronic Global Bhd and its 11.7%-owned Ariantec Global Bhd (AGlobal), and this saw the two counters giving up most of their gains yesterday.
The move has also dampened sentiment in other penny stocks.
Industry sources said the stockbrokers' decision to stop PDTs from trading in the two counters just before the market resumed for the afternoon session yesterday is believed to be due to a verbal instruction by Bursa Securities, which could be the first such move by the exchange operator.
The two counters have been actively traded since last week. Shares of Metronic Global have jumped almost three-fold in two days to an intraday high of 31.5 sen yesterday morning from Tuesday's closing of 11 sen. For AGlobal, its share price soared to an intraday high of 17 sen from Tuesday's close of 10 sen.
Metronic Global closed unchanged at 25.5 sen, with 348 million shares traded while AGlobal closed up 0.5 sen to 14 sen with a volume of 209 million shares.
On Wednesday, Metronic Global saw a whopping 845 million shares transacted in a single day compared with its issued share capital of 635 million shares, bringing to mind the heavy trading in Iris Corporation Bhd shares several years ago.
AGlobal has an issued share capital of 578.75 million shares of 10 sen each. Over the last two days, Metronic Global had sold 5.3% in AGlobal to reduce its stake to 11.7%.
It is understood that Bursa Malaysia had, via "moral suasion", requested traders to halt trading in shares of Metronic Global and AGlobal and to close their positions yesterday, in what is seen as an attempt to curb excessive speculation in the two counters.
"There was a lot of stockists' play. How can the stock (Metronic Global) trade at more than its paid-up capital? This is not healthy and it's strange," a stockbroker told SunBiz.
Unlike retail traders, PDTs only have to pay the clearing fee and not the brokerage fee and stamp duty when trading in stocks on Bursa Securities. The clearing fee is only 0.003% of the value of the stocks traded.
Both Metronic Global and AGlobal were issued an unusual market activity (UMA) query by Bursa Securities on Monday and last Friday, respectively.
An industry observer said Bursa Securities' request to stockbroking firms to stop PDTs from dabbling in the shares of the two counters could have come after the earlier UMA queries proved ineffective in curbing the excessive speculation.
The authorities, the observer said, could have taken the step of designating the counters but this would have a huge impact on the market and individual investors and so decided on using "moral suasion".
The most recent move by Bursa Malaysia to curb speculative trading was when it designated the shares of timber-related Harvest Court Bhd last November, which essentially meant that trading in the counter would require payment upfront. The counter was trading at a low of 7.5 sen on Sept 27, 2011, before skyrocketing to RM2.13 on Nov 14, 2011, after news of the emergence of Datuk Raymond Chan Boon Siew as the company's new substantial shareholder. Harvest shares closed at 80 sen yesterday.
Commenting on Metronic Global's reply to the UMA query, which said it had received information from its managing director and substantial shareholder Dr Ng Tek Che that he had been approached by parties keen to acquire his stake in the company, industry players said the reply should have included the timeframe to complete the talks.
They said Bursa Securities should ensure that any reply to an UMA query lend credence to the action.