Bursa Malaysia Selloff: Selected Stocks Continue To Exhibit Volatility

Alex Cheong Pui Yin

22nd January 2024 - 3 min read

Several stocks on Bursa Malaysia continued to exhibit volatile price movements today, with two counters – Rapid Synergy Bhd and YNH Property Bhd – once again hitting limit down this morning, not long after the exchange opened. It continues a period of unusually volatile trading activities that have been taking place since the past two weeks, where several counters have hit limit down prices in consecutive days.

Specifically, Rapid Energy opened at limit down with a share price of RM1.95 this morning, down 29.9% from its previous close. Meanwhile, YNH Property closed last week at 85.5 sen, and also opened at limit down this morning at 55.5 sen. (To briefly explain, limit down refers to a circuit breaker mechanism that caps the lowest price that a stock can fall to during a single trading session. It is implemented to prevent panic selling and market crashes.)

That said, a few other companies that have also been impacted badly in the recent bloodbath were able to find some respite – for now. For instance, Sarawak Consolidated Industries Bhd (SCIB) – which also hit limit down last week – saw its share price surging 41.38% to 41 sen shortly after Monday’s opening bell. At closing today, it was trading at 44 sen, 50% above last Friday’s closing.

Similarly, the share price of another limit-down casualty from last week, Widad Group Bhd, also rose by about 13.6% to 12.5 sen this morning. It then went on to close at 14 sen today for a 22.7% gain.

The current episode of intense selloff on Bursa Malaysia began approximately at the turn of the year with three specific stocks, namely Rapid Synergy, YNH Property, and Imaspro – all of which are linked to prominent investor Datuk Dr Yu Kuan Chon. The negative sentiment subsequently spread to include numerous other companies, such as SCIB, Mercury Securities, and Silver Ridge Holdings Bhd. Some technology stocks were also hit, such as Globetronics Technology Bhd and Heitech Padu Bhd.

This episode is highly unusual by any penny stock trading standards. To illustrate, Rapid Synergy’s share price has withered by 93% since the start of the year, whereas YNH Property is now down by approximately 86% year-to-date. Bursa Malaysia even had to freeze the lower limits for Rapid Synergy and YNH last Wednesday “due to the counters trading at static limit down prices for two consecutive trading days”, while various brokerages refused to issue margin trading facilities for the affected stocks.

This eventually prompted Bursa Malaysia and Securities Commission Malaysia to issue a joint statement last week, stating that “the Malaysian stock market fundamentals remain strong”. The statement also stressed that the recent decline in share prices is limited to only a few small-cap stocks, and that the authorities are already “closely monitoring” the situation.

In the meantime, investors are urged to be extra cautious as they invest in the capital market, and to do their due diligence before making any decisions.

(Source: The Edge Malaysia)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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