Cape EMS managing director and chief executive officer Christina Tee Kim Chin.
PETALING JAYA: Margin calls forced Cape EMS Bhd
’s single-largest shareholder to sell more than one-third of her shares in just two days this week.
Christina Tee Kim Chin, who is also the managing director and chief executive officer, had to pare down her stake in the Johor-based electronics manufacturing services firm to 25.6% as compared to 39.9% at the beginning of the month.
In total, about 140 million shares were sold by Christina on Aug 5 and 6. This represents a drop of more than 35% in the number of shares held by Christina.
Her sister, Tee Kim Yok, also suffered forced selling on Aug 6, resulting in the disposal of almost 4.2 million shares worth RM1.7mil. Kim Yok also sits on the board with an executive role.
The Cape EMS counter has been on a free-fall over the past three weeks, wiping out 60% or RM610mil of its market capitalisation since July 15 until Aug 6.
The massive equities sell-off globally on Aug 5 further roiled the stock.
On Aug 5, the FBM KLCI plunged by over 74 points or 4.6%. On the same day, Cape EMS lost about 17% of its share price.
Stock exchange filings showed that Christina sold 15.22 million shares on Aug 5 and 112.74 million shares the next day.
“The filings showed that the shares sold were from the pledged securities account, which means Christina faced forced selling. The sharp fall in the share price caused the margin call,” a dealer told StarBiz.
The Cape EMS stock, however, rebounded by 7.41% or three sen yesterday to 43.5 sen, likely due to investors buying the dip.
Interestingly, Cape EMS was also the most actively traded counter yesterday, with 736.24 million shares changing hands.
It is worth noting that the Employees Provident Fund (EPF) had recently emerged as a substantial shareholder in Cape EMS, despite the heavy selling faced by the stock.
On July 26, the EPF bought an additional 3.5 million shares in the group, raising its stake to 5.04%.
On that day, the Cape EMS stock traded between 69 sen and 88 sen, which represents a premium of at least 37% to yesterday’s closing price.
Barely a week after the EPF’s entry, Kim Yok transferred 20.4 million shares to the former. This reduced Kim Yok’s equity interest to 4.75% and she ceased to be a substantial shareholder.
Cape EMS was listed on the Main Market on March 10, 2023 at an issue price of 90 sen.
The stock touched a peak of RM1.51 in April last year.
