KUALA LUMPUR (March 27): Shares of Boon Koon Group Bhd hit a five-year high of 29.5 sen on speculation that the company's disposal of its 25% stake in Hitachi Capital Malaysia Sdn Bhd would contribute to its earnings.
The disposal, which is expected to be completed in the first quarter of this year, is subject to the approval of Boon Koon's shareholders at an extraordinary general meeting this Friday.
The counter was among the top active stocks, and increased 3.5 sen or 13.46% to 29.5 sen at 3.45pm, after rising to 31 sen earlier. About 50 million shares were traded, valuing the company at RM81.64 million. Year to date, the stock has seen a return of 145.8%.
According to technical charts, institutional buying constituted 79% of the buying, which has been the case for the past five days.
The stock turned bullish at 13.5 sen on March 7 when its share price made a breakthrough against multiple moving average line.
"The price hit double this morning and may go for 34 sen or 41 sen if the momentum continues. The market might be speculating on Boon Koon's interest disposal in Hitachi," SJ Securities Sdn Bhd senior remisier KC Goh told theedgemarkets.com.
On Dec 16, 2016, the Penang-based rebuilt commercial vehicle manufacturer said it plans to dispose of the remaining 25% equity in hire-purchase financing firm, Hitachi, for RM22 million as it did not fit into its long-term strategy.
It had sold the other 75% stake in 2011 to Hitachi Capital Corp for RM9 million.
The corporate exercise is expected to contribute positively towards Boon Koon's earnings for FY17 with a RM16.1 million gain on disposal or profit per share of about six sen.
BKOON (7187) - Boon Koon Group hits five-year high on speculation of Hitachi stake disposal
http://www.theedgemarkets.com/my/article/boon-koon-group-hits-five-year-high-speculation-hitachi-stake-disposal
