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Thursday, October 15, 2020 – 12:40 pm
WILMAR International’s share price plummeted as high volumes changed hands on Thursday, also on the first trading day of its newly listed Chinese subsidiary, prompting an inquiry from the Singaporean broker.
In the first 20 minutes of trading, the shares traded on the motherboard gained 1.7 percent or S $ 0.08 to reach S $ 4.74. But it quickly fell to a low of S $ 4.26 around 10.13am. M., down 8.6% or 0.04 Singapore dollars since Wednesday’s close.
It regained some ground to trade at S $ 4.41 at noon, down S $ 0.25 or 5.4 percent.
The accountant posted the second heaviest volume on the Singapore Stock Exchange, with around 33.8 million shares changing hands, and was the most actively traded by value.
More than 200 large transactions, each worth more than S $ 150,000, were carried out in the morning session, according to Shareinvestor data. No marriage agreements were recorded.
Thursday also marked the start of stock trading in Yihai Kerry Arawana Holdings (YKA), the 89.99% subsidiary of the agri-food giant that joined the ChiNext technology board of the Shenzhen Stock Exchange.
YKA shares made a brilliant debut at 9.30am. M. At 48.96 yuan, almost double its initial public offering (IPO) issue price of 25.7 yuan.
But then they lost some steam, dropping to 42.93 yuan at the 11:30 am business break. That is still 67% higher than the IPO price, but 12.3% lower than the opening price.
On the Singapore Stock Exchange (SGX), around 11 am, the trader noted “unusual price movements” in Wilmar shares. The company responded an hour later that the increased trading volume of its shares “may be attributable” to the start of the YKA trading.
YKA is a wholesaler and distributor of food products such as small packet edible oil, rice and flour. Their namesake cooking oil with the Golden Dragon Fish logo has been a staple of Chinese kitchens for decades.
Its long-awaited listing had raised about 13.93 billion yuan (S $ 2.81 billion) after applications closed last month, making it the largest initial public offering in Shenzhen, according to Bloomberg. The proceeds will be used for 19 food production projects in China.
Shares in the IPO were highly underwritten: 600.5 times for offline investors, raising 5.82 billion yuan, and about 1.750 times for online retail investors, raising 3.9 billion yuan. Bloomberg noted that the IPO appealed to individual mainland retailers promising to share the profits with the Chinese people and contribute to the economy of their home country.
Strategic investors, including Singapore’s sovereign wealth fund GIC, accounted for 4.18 billion yuan, or 30 percent of the IPO’s shares.
SGX’s letter on Thursday is the second inquiry sent to Wilmar in the last four months. In June, the shares of the agri-food group rose amid active trading, prompting the exchange operator to consult. Wilmar later announced that YKA had submitted an updated IPO prospectus.
On September 24, Wilmar shares were back in strong trading, after the Singapore-listed company announced YKA’s IPO price.
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