HLCAP - PUBLIC SHAREHOLDINGS SPREAD
| Company Name | HONG LEONG CAPITAL BERHAD |
| Stock Name | HLCAP |
| Date Announced | 12 Feb 2015 |
| Category | General Announcement |
| Reference No | HC-150212-6A0CA |
| Type | Announcement |
| Subject | PUBLIC SHAREHOLDINGS SPREAD |
| Description | HONG LEONG CAPITAL BERHAD ("HLCB" OR THE "COMPANY") Status Announcement on Compliance with the Required Public Shareholding Spread |
We refer to the announcement dated 13 January 2015 wherein the Company informed that Bursa Malaysia Securities Berhad (“Bursa Securities”) had vide a letter dated 13 January 2015 required the Company to show cause by making a written representation as to why Bursa Securities should not find the Company in breach of Paragraph 8.02(1) of the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”) and impose one or more penalites including suspension of the trading of the Company’s securities pursuant to Paragraph 16.19(1) of the Listing Requirements. Pursuant to Bursa Securities’ letter dated 13 January 2015, the Company had made a written representation to Bursa Securities on 20 January 2015. HLCB writes to inform that Bursa Securities had vide its letter dated 12 February 2015 informed the Company that after due consideration of all the facts and circumstances of the matter, Bursa Securities found HLCB to have breached Paragraph 8.02(1) of the Listing Requirements for its failure to comply with the public shareholding spread requirement. Bursa Securities has decided to impose a suspension on the trading of HLCB’s securities for the aforesaid breach pursuant to Paragraph 16.19(1)(a)(ix) of the Listing Requirements. In this respect, the suspension will only be uplifted upon full compliance of the public shareholding spread in accordance with Paragraph 8.02(1) of the Listing Requirements. HLCB is also required to announce to Bursa Securities concurrently with the issuance of the quarterly financial statements the status of its public shareholding spread and the rectification plan, if any. In arriving at the aforesaid decision, Bursa Securities has considered, amongst others, the following factors:- (a) HLCB did not have a plan to rectify the shortfall in the public shareholding spread despite having been granted a total of 21 months extension of time from 28 February 2013 until 30 November 2014 to address the shortfall; and (b) The objective of the public shareholding spread requirement under the Listing Requirements was to ensure there was sufficient market liquidity to facilitate the buying and selling of the shares in an orderly manner and thereby, facilitating genuine price discovery. The significant lack of trading liquidity in HLCB shares during the period of non-compliance rendered HLCB shares susceptible to substantial share price movement arising from trading by a small group of investors as indicated, amongst others, from the following:- 1. For the 3 month period from November 2014 to January 2015 – - The daily volume traded in HLCB shares was low, ranging from a low of 100 shares to a high of 64,000 shares. Average volume traded was only 6,110 shares which represented only 0.00247% of HLCB’s 246.89 million issued shares; - HLCB shares were traded with wide bid-ask spread price. The bid ask spread price reached a high of RM4.70. In addition, the bid-ask spread count that was more than RM0.30 spread was close to 70% of the total orders; - In respect of the bid-ask spread size of HLCB shares, 88% of the best bid size fell under the category of 1,000 shares and below and 63% of the best ask size fell under the category of below 2,000 shares; and - There was significant intraday price movement (i.e. fluctuation as high as RM3.74 on 5 December 2014); and 2. HLCB shares had seen significant share price movement within the last 2 years. HLCB share price had increased from the take-over offer price of RM1.71 on 14 January 2013 to a high of RM14.60 on 17 June 2014. As at 11 February 2015, HLCB share price closed at RM12.28. In this regard, Bursa Securities had in the past issued 2 Unusual Market Activity queries (on 8 March 2013 and 16 January 2014) and on both occasions, HLCB confirmed that it was not aware of any corporate development relating to HLCB Group’s business and affairs or any other possible explanation that could account for the unusual trading activities. Further to that, in view of the sharp rise in the price of HLCB shares, Bursa Securities had also issued a Market Alert (on 18 March 2014) advising investors to exercise caution and to make informed decision in the trading of HLCB shares. In the circumstances, the trading of HLCB’s securities will be suspended with effect from 3 March 2015 unless an appeal is submitted to Bursa Securities on or before 23 February 2015. In the event HLCB submits an appeal to Bursa Securities, the Company is required to make an announcement of the appeal and that the suspension on the trading of HLCB’s securities on 3 March 2015 will be deferred pending the decision on HLCB’s appeal by Bursa Securities. This announcement is dated 12 February 2015. | |
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