SIME not on buy list for now say fund managers

They say several areas of the company lack clarity

PETALING JAYA: Fund managers are still not ready to buy into conglomerate Sime Darby Bhd given the absence of clarity in several areas of the company.

“No, we will not buy into Sime at the moment,” Danny Wong from Areca Capital, who manages more than US$300mil in funds, said yesterday.

“We exclude companies with negative newsflow from our buying list unless we are sure they are unfounded rumours. In Sime’s case there is some uncertainty,” Wong said.

Sime was thrust into the limelight last month after news on the company’s cost overruns of about RM1bil hit the market.
Datuk Mohd Bakke Salleh

Currently, the outcome of a forensic audit report on the company is still pending.

It has also been reported that it remains unclear when Felda Global Ventures Holdings Sdn Bhd president and chief executive officer Datuk Mohd Bakke Salleh, the man entrusted to take over the company following the exit of former head honcho Datuk Seri Ahmad Zubir Murshid, is set to finally step in and assume his new position.

“That is the catalyst the company needs right now and it is missing,” a foreign fund manager, who concurred with Wong, remarked.

Following the debacle unravelled last month, investors wasted no time in dumping the stock, sending it to as low as RM7.60 or more than 10% lower prior to the day the news on the cost overuns broke.

Sime shares have recovered a little since, closing 2 sen lower to RM8 yesterday.

Meanwhile, an analyst said Permodalan Nasional Bhd (PNB), which holds 50.89% (direct and indirect stake) in Sime Darby according to Bloomberg’s latest data, was unlikely to continue to accumulate shares in the firm in the near term given that the stock price had “sort of stabilised for now.”

“I don’t think PNB will spend significant money on acquiring more Sime Darby shares,” an analyst with TA Securities said.

PNB on June 23 raised its direct stake by 2.8% in Sime.

At the same time, a separate filing yesterday showed that almost the same number of shares were disposed by PNB’s biggest unit trust scheme, Skim Amanah Saham Bumiputera, on the same day and the following day.

No transaction price was disclosed.


- by thestar.com.my