Hogging the volumes list yesterday were PN17 companies Patimas Computers Bhd and Silver Bird Group Bhd. Destini Bhd has also been in the news.
Patimas was the most actively-traded counter of the day, rising 1.5 sen to close at 5 sen on volume of 58.79 million shares. Silver Bird was up 4 sen to close at 9 sen on volume of 29.82 million shares while Destini was down 1 sen at 34.5 sen on volume of 505,600 shares.
“I would still be cautious. The plays on these stocks are flimsy, rotational and could end within days. I wouldn't pay much attention to it,” said TA Securities senior technical analyst Stephen Soo.
Soo added that while market breadth had become more decent in the last two days, the quality of plays on the lower liners was yet to be seen. For a clearer sign, volumes and interest have to be seen on more counters, and over a longer period.
Another dealer opined that the current plays were mainly for significant shareholders of the company to “clear stock.”
“These plays are not sustainable. It's very trading-oriented. Those who want to participate have to be very nimble. In my opinion, once a company is in the PN17 bracket, it is quite a bleak future moving forward, even if things get better. It's just hard to regain the trust of the investing public again,” he said.
Another market observer said that some of the shareholders of these stocks probably held their positions on margin, and needed to sell the shares to avoid margin calls.
He said that market talk was that Silver Bird might be getting a new shareholder to rescue the company out of its besieged predicament. Silver Bird is currently working with KAF Investment Bank Bhd on the process of submission of its proposed regularisation plan to the relevant authorities to be uplifted from its PN17 status.
“The regularisation plan could involve the entrance of a white knight,” said the observer.
Silver Bird has been hogging the limelight this year for all the wrong reasons. There have been a series of legal actions apart from it sinking deeper into the red for the fourth quarter ended Oct 31 when it recorded a net loss of RM18.18mil on revenue of tRM25.62mil. For the full year, it registered a net loss of RM338mil on revenue of RM129.96mil.
According to the forensic report issued in May, Silver Bird's trade receivables included incorrect accounting entries and interbank transfers camouflaged as payments from the debtors.
In Destini's case, it told Bursa that it would make an application to Bursa Malaysia Securities Bhd to uplift its PN17 status once it recorded a net profit in two consecutive quarters immediately after the completion and implementation of the restructuring scheme. It said its regularisation plan or corporate exercises had been completed on Sept 13, 2012.
Formerly known as Satang Jaya Bhd, Destini also told Bursa that it was expanding its servicing of aviation and marine safety survival equipment with the purchase of a building in Shah Alam for RM14.8mil. It was buying the property, comprising a five-storey office building and two-storey warehouse, from CSL Manufacturing (M) Sdn Bhd.
In early November, Patimas announced that it was a PN17 company due to the financial statements for the period from Jan 1, 2011 to March 31, 2012, where the auditors have expressed a disclaimer of opinion.
In the audit disclaimer opinion from Messrs Ernst and Young, it was stated that the auditors were not able to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion. The company intends to formulate a regularisation plan to address its PN17 status.
Patimas' consolidated shareholders' equity stood at a deficit of RM19.9mil on March 31, 2012 which is below 25% of the issued and paid-up share capital of RM75.79mil.
By TEE LIN SAY, linsay@thestar.com.my
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