Share buyback by two Serba Dinamik founders on the cards?

SERBA Dinamik Holdings Bhd co-founders Datuk Dr Mohd Abdul Karim Abdullah  and Datuk Awang Daud Awang Putera have expressed desire to buy back the shares that they were forced to sell earlier due to margin calls.

Since acquiring five million shares on May 31 to cushion the fall of the global integrated oil & gas (O&G) outfit following the flagging of accounting matters pertaining to the company’s FY2020 statutory audit by its former external auditor KPMG PLT which raised his shareholding to 27.07%, Abdul Karim has been on a ‘selling spree’.

The group managing director/CEO of Serba Dinamik last disposed of 95 million shares in the open market at an average price of 35 sen/share on June 29 due to forced selling which trimmed his stake in the company to 21.59%.

Meanwhile, Awang Daud who is also the non-independent non-executive director of Serba Dinamik parted with almost 27 million shares between June 28 and June 30 – also because of forced selling emanating from margin call – which further reduced his stake in the company to 0.69%.

“Potentially, both shareholders will start to accumulate the stock once they put their margin call issue behind them,” a source close to the company’s top management told FocusM.

“Moreover, the share price of Serba has stabilised substantially in view of strong buying interest from retailers, hence looking ripe for picking.

“Another plus point to consider is that Serba Dinamik will start its formal engagement with EY (Ernst & Young Consulting Sdn Bhd) on Wednesday to start the ball rolling on the jobs scope provided by Bursa Malaysia.”

Recall that the company had officially engaged EY as its independent reviewer to assess the accuracy and veracity of the matters highlighted by KPMG as per Bursa Malaysia’s deadline last Friday (July 2).

In a related development, a market observer who is familiar with the counter expects a positive outlook for Serba Dinamik in the week ahead following EY’s appointment.

“Technically speaking, the share price could potentially rebound to the 65 sen-75 sen range depending on the development of its audit case,” the market observer told FocusM.

“Hopefully, we can hear more positive developments with regard to the appointment of new independent directors over the next few days.”

At this level, with most negative news been already factored in, the market observer expects selling pressure to be “not as aggressive as before or could be absorbed by strong buying interest”.

“The current price is very attractive in terms of risk and reward with 29.5 sen being a decent support level,” he added.

At the close of Friday’s (July 2) trading, Serba Dinamik was up up 0.5 sen or 1.32% to 38.5 sen with 542.68 million shares traded, thus valuing the company at RM1.43 bil – July 5, 2021

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