Is there a resolution at Apex Equity?

Movements in company could signal end of dispute between shareholders

THERE seems to be some movements in Apex Equity Holdings Bhd that could signal the end of a longstanding dispute between some shareholders of the stockbroking firm.

Yesterday, Apex saw 23% of its paid-up or 49.77 million shares changing hands at RM2 each.

This was 19 sen or 10.5% above yesterday’s closing price of RM1.81.

The stock is up by about a quarter since the start of the year, giving it a market capitalisation of RM387mil.

Based on the company’s shareholder data, no one single shareholder holds that many shares.

Two key shareholders of the company are Chan Guan Seng ( pic) and Datuk Azizan Abd Rahman.

Chan, who is Apex’s major shareholder and executive chairman, holds 17.81 million shares or a 8.79% stake directly with another 23.24 million shares or a 11.47% stake held indirectly through Permanent Mutual Holdings Sdn Bhd.

Azizan, meanwhile, holds 8.26 million shares or a 4.08% stake in the company.

One of the sellers is believed to be Azizan, who once served as the director-general of the Labuan Offshore Financial Services Authority and chairman of the Association of Stockbroking Companies of Malaysia.

While the other sellers cannot be confirmed, the buyer is believed to be a Labuan investment bank, sources say.

The investment bank is also not a proxy for any party, the sources say.

Apex owns JF Apex Securities Bhd - one of the last few remaining non-bank-backed stock brokers operating in Malaysia.

Talk of shareholding changes at Apex Equity Holdings has been around for a while now, especially after disagreements between its key shareholders that go back to 2012.

Besides Chan and Azizan, a stake of close to 40% in Apex is believed to be held by Lim Siew Kim, the daughter of the late Tan Sri Lim Goh Tong of the Genting group and parties aligned to her.

Incidentally, Siew Kim is the sister-in-law of Chan.

Both parties - Siew Kim and Chan - are reportedly at loggerheads, with the media labelling the shareholder tussle as a family feud.

What’s the status of this is not known, but expectations are that Apex could see new shareholders coming in.

Two years ago, 64-year-old Chan had informed the board that he intended to sell some of his shareholdings in the company, “subject to the right price” amid intense competition in the industry.

Chan is a seasoned stockbroker widely credited to have built up the operations of the-then small Kajang-based JF Apex through many of the industry’s upturns and downturns.

But changes in the stockbroking industry such as online trading has resulted in returns being not as lucrative as before.

Still, it is considered as one of the more conservative and efficient broking houses with little borrowings and ample cash.

In the second quarter ended June 30, 2017, its earnings rose 54% to RM3.84mil from RM2.49mil a year ago.

In the first half, its earnings jumped 107% to RM8.35mil from RM4.02mil in the previous corresponding period.

It was previously reported that Apex had garnered interest from a fairly large Chinabased firm involved in the same industry and potential buyers from East Asia.

Under Malaysian rules, up to 70% of interest in securities firms can be sold to foreigners,

In the past, consolidation among brokers has taken place with price-to-book value multiples of between 1.1 and 1.9 times.

More recently, CIMB Group Holdings Bhd said it had signed a conditional share purchase agreement to buy the entire equity interest of Jupiter Securities from Olympia Industries Bhd for RM55mil, translating to a price-to-book value of 2.5 times Jupiter’s financial year 2016 earnings.