SHAREHOLDERS of Sarawak Consolidated Industries Bhd (SCIB) should not be unduly worried over the recent share disposal exercise by the company’s head honcho as the action was inevitable due to the combined effect of forced selling and margin call.
Thus far in July alone, group managing director and CEO Rosland Othman had parted ways with six million SCIB shares.
According to the latest Bursa Malaysia filing dated July 19, Rosland sold one million shares in the open market on July 16 at an average price of 74.43 sen which reduced his stake in the company to 3.24%.
This followed the disposal of another two million shares a day earlier (July 15) at an average price of 73 sen and another one million share each on July 14 (average price 66.3 sen), July 13 (average price 68.18 sen) and July 12 (average price 65.88 sen).
Prior to this, Rosland has also notably disposed a total of 14.41 million shares between June 28 and June 30 which brought down his stake in the company to 4.46% during the month.
“The margin call is over for now,” Rosland told FocusM. “I’m in the midst of arranging new margin financing facility to acquire more shares in due course. It is unfortunate that I have to restructure my shares in SCIB so that they can be better managed.”
Rosland also dismissed rumours claiming his disposal is related to his intention to exit SCIB or demonstrating his lack of confidence in the company as baseless.
“Beyond that, SCIB is currently looking into strengthening its governance and internal controls in order to restore investor’s confidence,” he pointed out.
“Above all else, I need to reiterate that our business has minimal exposure to Serba Dinamik Holdings Bhd … in fact, we have a solid business model which is heavily reliance on our own clientele and outstanding order book.”
To re-cap, Serba Dinamik founder Datuk Dr Mohd Abdul Karim Abdullah had on numerous occasions dismissed claims that he interfered in the running of SCIB and sister company KPower Bhd save for his presence as non-executive chairman and controlling shareholder with a stake of 36.8% and 32.36% in SCIB and KPower respectively.
Commenting on business outlook, Rosland foresees the prospect as good especially when Malaysia enters into the second phase of the country’s recovery plan where many construction projects that have been put on hold can re-commence.
“As for now, SCIB is gearing up to re-start our business. Some domestic projects are ongoing in a moderate pace but more importantly, we remain positive on the business prospect ahead,” he projected.
“There is a very promising outlook with regard to our domestic tender book especially in Peninsular Malaysia. We are proud to say that SCIB has emerged one of the best candidates given our expertise and proven track record.”
In separate note, a market observer who is familiar with the share price movement of SCIB expects the worst is over for SCIB given that investors have started to accumulate the stock recently.
“At yesterday’s (July 21) close, SCIB has rebounded 2.74% to 75 sen from a low of 45 sen as the company’s fundamentals are still intact while investors are gradually regaining their trust by betting on its strong outlook with a solid dividend policy,” suggested the market observer.
“The risk and reward seem undemanding for mid- and long-term investors given SCIB could be one of the potential construction sector winners once Malaysia embarks on its economy re-opening under the second phase of its recovery plan.” – July 22, 2021