SUPERMAX STOCK FALLS AFTER MD CONVICTED OF INSIDER TRADING

Counter finished 5.3pc lower yesterday following group MD’s conviction

SUPERMAX Corp Bhd closed yesterday 5.26 per cent lower to RM1.98 following the insider case involving group managing director Datuk Seri Stanley Thai Kim Sim.

The counter opened at RM1.82, which was an intraday low and 12.9 per cent lower than the closing price of RM2.09 on Friday.

Thai had on Friday been sentenced to a five-year jail term and fined RM5 million.

Supermax was one of the most active stocks, with 17.197 million shares changing hands, 144.31 per cent higher than Friday’s volume.

Since Thai was charged at the Sessions Court here with insider trading related to Supermax’s former associate APL Industries Bhd on December 16 2014, its shares had gained 22.98 per cent.

Over a year, however, the counter has dipped more than 10 per cent.

CIMB Investment Bank Bhd (CIMB IB) has downgraded Supermax to a “hold” from an “add” rating, with a lower target price of RM2.03 from RM2.46 previously.

It placed a wider discount of 50 per cent from 40 per cent to the Malaysian glove sector average to account for reputational risk and further uncertainties.

CIMB IB said in a research note that while the company’s prospects were improving and it should deliver strong earnings ahead, the incident would weigh down on Supermax’s share price and create a share price overhang in the medium term.

Meanwhile, Supermax assured all stakeholders that it was business as usual at the glove-making company.

In a statement on Sunday, Supermax chairman Tan Sri Rafidah Aziz said his charge was related only to APLI and not Supermax.

Thai’s lawyers had filed for an appeal on the conviction and “manifestly excessive” sentence pronounced by the Kuala Lumpur Sessions Court, she said.

“At this juncture, a stay of execution had been granted pending the said appeal. It is important for shareholders, customers and business affiliates to understand Supermax’s management and structure is very sound and will continue to implement the strategic plans already in place,” she said.

“Supermax remains committed to achieving higher levels of performance, and that operations both in Malaysia and overseas meet the set goals,” Rafidah added.