Within a span of less than five recent market days, the managers swooped up some RM3.9bil worth of stock in three major block sales. It began last week, when Petroliam Nasional Bhd (Petronas) put up for sale a minimum of close to 6% of MISC Bhd, valued at RM1.8bil and 7.7% of KLCCP Stapled Group (KLCCSS), valued at RM996.8mil. RARELY do institutional fund managers decide on any big purchases towards the end of the year when they are usually busy closing their books. Yet within a span of less than five recent market days, the managers swooped up some RM3.9bil worth of stock in three major block sales. It began last week, when Petroliam Nasional Bhd (Petronas) put up for sale a minimum of close to 6% of MISC Bhd, valued at RM1.8bil and 7.7% of KLCCP Stapled Group (KLCCSS), valued at RM996.8mil. The shares were priced at discounts of between 5% and 6% of their five-day volume weighted average prices (VWAP) respectively. Interestingly, investor demand saw both deals increase in size by an additional 10% each, bankers familiar with the deal say. The shares were swooped up within hours, the bankers tell StarBizWeek. On Monday, another block of shares were put up for sale valued at just under a billion ringgit. This was the last remaining block of shares that Aabar Investments PJS held in RHB Bank Bhd. A book building exercise that began on Monday after market close was quickly filled by that evening, ending with some 169.52 million shares of RHB Bank being sold at RM5.50 apiece, for a total of RM932.38mil. In total, this means that funds have written cheques to the tune of RM3.9bil for block sales of Malaysian equities within less than five market days. No bad, considering the current pandemic and the fact that funds are rarely big buyers when they are about to close their books for the year-end. “Covid is the game changer, ” quips one investment banker. He says that as the stock market’s index shows, the sentiment for next year has improved significantly compared with earlier in the year at the onset of the pandemic. One fund manager who bought small amounts of the recent blocks on sale summarised it: “It’s simply the recovery play”. Another fund manager elaborates: “Many big investors and funds are getting into blue chips. There is an across the board recovery play, sans glove stocks, ” he quips. The block sales of shares by Petronas and Aabar were carried out jointly by Maybank Investment Bank Bhd and JP Morgan. Banking sentiment helps RHB sale The Aabar block of RHB Bank came about amid a spike up in sentiment surrounding banking stocks as beneficiaries of an economic recovery. The sector’s sentiment was no doubt boosted by the decision of Public Bank Bhd to offer a surprising 4-for-1 bonus issue of shares. The last time the bank did any such exercise was in 2004 when it embarked on a share split. It is understood that Aabar’s advisers are the ones who mooted the idea of the share sale amid the positive banking sentiment. The recent sale by Aabar of its RHB Banks shares marks the exit of the Middle Eastern investor in RHB Bank, which along with its sister company, Abu Dhabi Commercial Bank (ADCB), had been a shareholder since 2008. Aabar, which paid RM5.9bil for its stake in RHB in 2011 (buying it from ADCB), had been keen to exit its holding in RHB in recent years. In 2016, Aabar’s 24.9% stake was reduced to 17.% after it declined to participate in a rights issue of shares undertaken by RHB. Aabar subsequently sold off blocks of RHB in three placement exercises spanning 2018 and 2019, which brought down its stake to 4.2% in RHB, which was the block of shares sold this week. The buyers of Aabar’s block of RHB shares include local and foreign institutional funds. It is also believed to have included CMY Capital Sdn Bhd, the vehicle of stalwart investor and co-founder of the RHB financial group Tan Sri Chua Ma Yu. Chua is believed to have also participated in the earlier placement exercises of RHB shares by Aabar. Meanwhile, investment bankers are pleasantly surprised by a current healthy deal flow, following a slowdown earlier in the year. “There are IPO’s galore, not necessarily like the very large offerings that came to the market in 2012, but decent size companies taking a view that a recovery is in store and that their earrings next year will be good, ” explains one investment banker. Included in the IPO deal flow are rubber glove manufacturers. In September, Smart Glove Corp, a disposal glove maker in Malaysia, picked Affin Hwang Investment Bank Bhd and RHB Bank for its planned IPO to take place next year, to raise some RM1bil, reports indicated. Earlier in August, another Malaysian glove maker Harps Holdings Sdn Bhd was said to be mulling a floatation to raise RM2bil. Sources say that Harps is being advised by Maybank Investment Bank. It also has been speculated that WRP Asia-Pacific, a large unlisted glove maker based in Sepang was looking to reverse itself into a locally listed firm. But will these manufacturers be able to still catch the rubber glove frenzy which seems to be fading with the onset of vaccines to fight off Covid-19?
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