Why Bursa only issued a UMA query to Genetec yesterday — when its share price had been surging since
KUALA LUMPUR (July 14): Genetec Technology Bhd, which hit its record high of RM18.58 after rising RM1.88 or 11% yesterday, was slapped with an unusual market activity (UMA) query by Bursa Malaysia.
The UMA query was issued to the company yesterday, despite its share price having surged by 394% since its closing price of RM3.76 on June 1.
When contacted, Bursa Malaysia said it does not automatically issue a UMA query to a listed company upon detection of a sudden significant fluctuation in the price and/or volume of traded securities.
"Given the dynamic nature of the capital market, prices rise and fall while trading volumes vary based on a wide range of factors. When price and volume changes can be explained on the basis that the performance of a particular stock is consistent with the market sector or is based on relevant development, a UMA query will not be issued although the stock will remain under surveillance.
"A UMA query is issued when there is unusual and/or significant movement in the price or volume of a counter and is unexplainable, i.e. there is no basis for the movement," the local exchange regulator explained in an email reply to theedgemarkets.com.
It added that the decision to issue a UMA query on unusual and material share price and/or volume movement will only be made after assessing various factors, based on clear internal guidelines and parameters.
"When the publicly listed company replies to the UMA query, the information disclosed aids investors to trade on an informed basis," it further added.
Meanwhile, Genetec responded to Bursa's UMA query on the same day and said it is unaware of any specific reason behind the unusual trading of its shares, besides its recent announcement on June 18 in relation to the new orders it secured.
"As at the date of this announcement, there is no corporate development in relation to the group's business and affairs that have not been previously announced, which may account for the trading activity, including those in the stage of negotiation/discussion," Genetec replied to the UMA query in a filing with the local exchange.
It added that it is not aware of any rumour, report or any other possible explanation to account for the trading activity, adding that its board confirmed that the company is in compliance with the Ace Market Listing Rules on immediate disclosure obligations.
It is worth noting that this is the second time the assembly line provider receives a UMA query from the exchange this year. The first one was issued on Jan 18.
On June 17, the group announced that it had secured new orders worth approximately RM47.9 million from existing customers who are global players in the electric vehicle (EV) and battery (RM42.5 million), and hard disk drive, electronics and semiconductor (RM5.4 million) segments.
"The secured orders are expected to contribute positively to Genetec's earnings for the financial year ending March 31, 2022," it said.
Genetec's share price spike followed the release of a report by research house CGS-CIMB dated June 28 that highlighted its confidence that it could benefit from the growing demand worldwide for EVs.
According to the note, the company was one of several public-listed companies with exposure to the EV and battery space, contributing to 93% of its RM205.6 million orders secured since February.
"While Genetec was loss making in FY21, it is confident that the worst is over and expects stronger results going forward, backed by a strong order book and established relationships with global EV manufacturers," CGS-CIMB said.
Genetec was the second top loser this morning after its share price fell as much as 98 sen or 5.27% to RM17.6 on profit taking. At noon break, the counter pared losses to RM17.94, still down 64 sen or 3.44%.
At RM17.94, it has a market capitalisation of RM905 million. There were 417,700 shares traded.
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