KUALA LUMPUR: Shares of Kuala Lumpur Kepong Bhd fell to a low of RM21.20 at midday on Friday, the lowest since Jan 27,2016, on news that a foreign shareholder had exited.
Stock market data showed 31.639 million shares were traded off-market at an average price of RM21. This was RM1.78 below Thursday's closing price of RM22.78.
The block of shares accounted for a 2.96% stake based on its paid-up of 1.067 billion shares.
At midday, the shares were down RM1.58 to RM21.20.
Earlier, AmInvestment Research said the recent exit of what might have been a foreign shareholder from KLK was a concern and could pave the way for other foreign funds to follow suit.
The research house said in a note it believes First State Investment Managers, UK, could be the shareholder that reportedly sold its entire stake of 31.6 million shares, at RM21 a share.
The sale price represented a 7.8% discount to KL Kepong's share price of RM22.78.
Ambank said First State could have exited the company due to environmental, social and governance concerns following KL Kepong's recent closure of four hectares of its estate due to fires.
According to Bloomberg, First State does not hold shares in IOI Corp or Sime Darby Plantation, and appears to only have investments in one plantation company in Malaysia, KL Kepong.
"IOI and Sime Darby Plantation’s main foreign shareholders are Vanguard, Black Rock, State Street Corporation and Government Pension Investment Fund Japan," said Ambank.
Prior to the placement at end-July 3029. KL Kepong's foreign shareholding was 17.37%.
Meanwhile, at end-August Sime Darby Plantation’s foreign shareholding was 10.26%, according to the company, while IOI’s foreign shareholding was 9.46%, based on Bloomberg filings, said Ambank.
The research house currently has a sell recommendation on KL Kepong with a fair value of RM23.12 a share.