AMTEK (Lim&Tan)

S$0.665-AMTK.SI

􀁺 Capital Group has ceased to be a substantial shareholder of Amtek on 31 Aug ’11, having sold 5,777,000 shares in the open market, reducing their stake to 25,046,000 shares or 4.61% of the company which is below the 5% disclosure level.

􀁺 Capital Group’s sale on 31 Aug ’11 of 5,777,000 shares had accounted for 65.6% of that day’s traded volume when the price ranged between 66-68.5 cents and closed at 66.5 cents.

􀁺 Since mid Aug ’11, Capital Group has been selling Amtek’s shares, partly contributing to the sharp selldown of the stock in the month of Aug ’11 when it declined from the mid-90 cents level to a low of 56.5 cents on 19 Aug ’11 below recovering recently on the back of its good results and attractive dividend payout.

􀁺 But we note that Capital Group has also been selling down other Singapore holdings as well (Singpost, CapitalMallsAsia and Capital Commercial Trust).

􀁺 While Amtek’s average traded volume since listing has only been about 1.4 mln shares, we note that on 1 Sept ’11 it spiked up to 13,859,000 and remained higher than average of 6,343,000 on 2 Sept ’11, the 2 days after that Capital Group went under the 5% disclosure level. If they were the bulk of sellers, they would only have 4,844,000 shares left.

􀁺 Some market commentators attributed the recent sharp rebound in CapitalMallsAsia’s stock price to Capital Group’s complete exit in the stock and also insider buying. Unfortunately for Amtek, Standard Chartered Pte Equity, its major shareholder had bought 9mln shares in the company in the month of June ’11 raising their stake to 29.9% and if they were to cross the 30% level, it would trigger a general offer. Hence, this could be the reason that they had stopped buying shares after that.