In what appears to be a U-turn, Permodalan Nasional Bhd (PNB) has in the past fortnight pared down its stake in the country’s largest conglomerate Sime Darby Bhd with the disposal of more than 47 million shares resulting in its direct interest being lowered to 13.87%.
According to Sime’s filing to Bursa Securities on shareholding changes last Wednesday, in the latest transaction, PNB disposed of 5.5 million shares on July 9 to reduce its stake in the conglomerate from 838.90 million shares or 13.96% to 833.40 million shares or 13.87%.
Data services indicated that the shares were sold off-market in a number of tranches with prices ranging from RM7.69 to RM7.80 per share.
According to Sime’s July 13 filing, PNB had disposed of 19 million shares on July 7 and a further eight million shares the following day to reduce its stake from 865.90 million shares or 14.41% to 838.90 million shares or 13.96%. The two blocs of shares were sold off-market at RM7.50 per share and drawing a total value of RM202.5 million.
PNB’s shareholding in Sime has gradually been reduced since early this month. It had disposed of over 15 million Sime shares on July 1, 2, July 5 and 6.
PNB’s paring down of its stake in Sime appears to reverse its manoeuvre last month where it had acquired a total of 170 million shares on June 23 which raised its stake to 880.98 million shares or 14.66%. PNB only had an 11.83% stake on June 16.
Sime’s share price rose 13 sen to close at RM8.16 on June 23.
Sime remained financially strong with contributions from its plantation, industrial, property and motor sectors at satisfactory levels.
Analysts believed that PNB had accumulated Sime’s shares to stabilise the stock following negative newsflow on the group’s losses totalling almost RM1 billion in cost overruns at its energy and utilities division.
An analyst said an institutional investor could have picked up the big chunk of the shares sold by PNB as Sime remained financially strong with contributions from its plantation, industrial, property and motor sectors at satisfactory levels.
“The stock has begun to inch towards the RM8 level. Many view Datuk Bakke Salleh’s appointment (as the new president and group chief executive) positively especially with his ability in restructuring Felda,” he said.
“Sime is not oversold but on the other hand it is unlikely to outperform anytime soon. It still has quite a bit of task ahead. It may have to continue to fine-tune its management if necessary,” the analyst added.
Its former president and group chief executive Datuk Seri Ahmad Zubir Murshid was asked to take a leave of absence following revelations of the huge losses.
Due to provisions to the tune of RM964 million, Sime posted a net loss of RM308.63 million in its third quarter ended March 31, 2010 (3QFY10) versus a net profit of RM150.57 million a year earlier. Its net asset per share stood at RM3.49 as at March 31.
In a written reply to an opposition lawmaker recently, Prime Minister Datuk Seri Najib Razak said the general financial position of Sime remained strong.
He also said in a separate written reply that Sime’s recent losses would not impact its 50% dividend payout policy.
Sime’s share price fell three sen to close at RM7.81. The counter had traded to a 52-week high of RM9.24 on Nov 11, 2009 and a low of RM7.35 on July 16, 2009. Currently, it has a price-earnings ratio of 26.25 times.
Written by Yong Min Wei
This article appeared in The Edge Financial Daily, July 19, 2010.
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