Rising shareholder activism across Asia
Often seen as a relative backwater for shareholder activism, Asian companies have not faced the same level of activism that Western companies have been accustomed to. However, the region is becoming a breeding ground for activist shareholders as the latter seek more opportunities beyond their traditional stronghold in the West.
22.07.2022
A rare case of warrant price runs ahead of its mother share
Some interesting developments happened at Metronic Global Berhad last week.
First, it was the resignation of former attorney general Tan Sri Mohamed Apandi Ali as its independent non-executive director on 14 July. Apandi, 72, who was appointed to the board in July 2021 resigned “due to personal commitments”, according to the Group's filing with Bursa Malaysia.
On the same day, Metronic also announced the emergence of Fitters Diversified Bhd as the Group’s new substantial shareholder after its unit Fitters Property Development Sdn Bhd subscribed for Metronic’s rights shares and excess rights shares recently.
Fitters Diversified now holds a 13.255% indirect stake or 201 million shares in Metronic which is involved in the provision of hardware and software required for buildings’ control and management. This is followed by Sanichi Technology Berhad with 13.068% stake and BCM Alliance Berhad with 6.66% stake.
But these developments pale in comparison to the extreme price volatility of its newly issued warrants. Subscribers of Metronic’s recently completed rights issue exercise would be laughing all the way to the bank for having reaped handsome profit from the free warrants that came with their subscriptions.
Mitigating the slippery path of palm oil price swings
As with the glove and technology stocks rallies in recent times, history has been proven right yet again with regard to the meteoric rise of plantation stocks’ prices: progressive rises will be followed by regressive falls. Whether a minority shareholder is smiling or not depends on when he bought into the stock and when he sold the stock. The danger is when retail investors enter close to the peak and as such suffer huge downside (or become a long-term shareholder). When asked why they did not enter earlier, the reply will most probably be that they were ‘monitoring’ the stock. And when the fear of missing out kicked in, they would have finally decided to buy the stock near its peak.
Analysis paralysis has been a weakness for many minority shareholders. Then again, ‘fools rush in where angels fear to tread’. Somewhere in between lies the right time to buy a stock and the right time to sell a stock. Hardly ever will a shareholder be able to buy a stock at its absolute low and sell it at its absolute high - though we always hope for this.