KUALA LUMPUR, 14 JULY: Bursa Malaysia has issued an unusual market activity (UMA) question to Genetec Technology Bhd, which achieved a new high of RM18.58 after increasing RM1.88 or 11% yesterday. Despite the fact that the company’s share price has risen by 394 percent since its closing price of RM3.76 on June 1, the UMA question was sent to it yesterday.
When contacted, Bursa Malaysia stated that when it detects a sudden large fluctuation in the price and/or volume of traded securities, it does not immediately issue a UMA enquiry to a listed business.
“Due to the volatile nature of the capital market, prices increase and fall, and trade volumes fluctuate depending on a variety of circumstances.” A UMA question will not be made if price and volume variations may be explained by the fact that a stock’s performance is consistent with the market sector or is based on relevant development, albeit the stock will remain under surveillance.
In an email response to theedgemarkets.com, the local exchange regulator noted, “A UMA query is made when there is unusual and/or large fluctuation in the price or volume of a counter that is unexplained, i.e. there is no justification for the movement.”
It went on to say that the decision to issue a UMA question on unusual and material share price and/or volume movement will be made only after a thorough examination of numerous circumstances and the application of defined internal guidelines and parameters.
“When a publicly traded business responds to the UMA question, the information provided assists investors in making educated trading decisions,” it continued.
Genetec, for its part, answered to Bursa’s UMA question on the same day, saying it is unaware of any specific explanation for the extraordinary trading of its shares, except than its recent announcement on June 18 about the fresh orders it secured.
Genetec responded to the UMA query in a filing with the local exchange, “As of the date of this announcement, there is no corporate development in relation to the group’s business and affairs that has not been previously announced, which may account for the trading activity, including those in the stage of negotiation/discussion.”
It further stated that it is unaware of any rumor, report, or other plausible explanation for the trading activity, and that the business’s board of directors has confirmed that the company is in accordance with the Ace Market Listing Rules on immediate disclosure responsibilities.
It’s worth noting that this is the exchange’s second UMA query of the year for the assembly line provider. The first was released on January 18th.
On June 17, the company said that it has received new orders totaling RM47.9 million from existing customers in the electric vehicle (EV) and battery (RM42.5 million) and hard disk drive, electronics, and semiconductor (RM5.4 million) industries.
“The secured orders are projected to have a favorable impact on Genetec’s profitability for the fiscal year ending March 31, 2022,” the company stated.
Genetec’s stock soared after CGS-CIMB released a study on June 28 expressing confidence in the company’s ability to profit from the expanding global demand for electric vehicles.
According to the memo, the company was one of several publicly traded companies with EV and battery exposure, accounting for 93 percent of the RM205.6 million in orders placed since February.
“While Genetec lost money in FY21, it is optimistic that the worst is behind it and expects improved returns in the future, backed by a solid order book and established connections with major EV manufacturers,” according to CGS-CIMB.
On profit taking, Genetec was the second biggest loser this morning, with its stock falling as far as 98 sen, or 5.27 percent, to RM17.6. At the midday break, the counter was down 64 sen, or 3.44 percent, to RM17.94.
It has a market value of RM905 million at RM17.94. A total of 417,700 shares were traded./n
