The shares of Eastern & Oriental dived after the Securities Commission said it's investigating trading related to the stock.
EASTERN & Oriental Bhd (E&O) lost more than RM400 million of its market capitalisation as nervous investors sold shares of the property developer after the Securities Commission (SC) said it's investigating trading related to the stock.
CIMB, in a research report yesterday, had advised investors to wait for the shares to drop to the RM1.50 level before they start accumulating the shares again.
Dealers said that the report helped stymie panic-selling in E&O's mother share, but it did not translate to the E&O call warrants, which had a free-for-all selldown.
The E&O call warrants, which expire at the end of this month, opened the trading day some 81 per cent lower at three sen. It ended the day at 3.5 sen per call warrant with some 30 million call warrants traded.
Just last Friday, E&O was among the most sought-after stock on the exchange, with investors chasing the shares up to the maximum limit-up level, following a Web-based news portal's report that the SC will order Sime Darby Bhd to make a general offer for the E&O shares which they do not own.
A year ago, Sime Darby had bought some 30 per cent of E&O, a niche based high-end property developer from Penang.
The report said that the decision was made after a review by the commission's leadership under its new chairman Datuk Ranjit Ajit Singh.
However, the same evening, the SC released a statement saying that its position on the general offer requirement remained unchanged as per its statement issued October last year, which said that Sime Darby does not have to make a general offer for the remaining shares in E&O.
The regulator also added that it has started examining the trading activities associated with the relevant counters arising from the rumours.
By Business Times