Insider Moves: Ranhill Utilities Bhd, BSL Corp Bhd, Sunway Bhd, Salcon Bhd

This article first appeared in Capital, The Edge Malaysia Weekly on November 20, 2023 – November 26, 2023

Notable filings

From Nov 6 to 10, notable shareholding changes at Bursa Malaysia-listed companies included those at Ranhill Utilities Bhd, which had seen the emergence of YTL Power International Bhd with 243.3 million shares, or an 18.87% stake, on Nov 1.

A subsequent filing by Ranhill Utilities shows that the shares were acquired from Cheval Infrastructure Fund LP, which ceased to be a substantial shareholder on Nov 1. The fund had been a shareholder since 2017, with 20.4% equity interest as at March 31 that year. The fund, acting via its general partner, TAEL Management Co (Cayman) Ltd, had an 18.88% stake at end-March 2023.

YTL Power’s 18.87% equity interest in Ranhill Utilities makes it the second-largest shareholder in the water, energy and engineering services group after its chairman and chief executive, non-independent executive director Tan Sri Hamdan Mohamad, who had direct and indirect stakes of 13.63% and 17.79% respectively as at March 31.

Ranhill Utilities’ share price closed at 91.5 sen last Wednesday, valuing the group at RM1.18 billion. The stock had risen 155.5% year on year (y-o-y).

Over at BSL Corp Bhd, Cita Realiti Sdn Bhd ceased to be a substantial shareholder after disposing of 38.9 million shares, or 2.01% equity interest, in the loss-making contract manufacturing group on the open market on Nov 2.

The company first emerged as a substantial shareholder in BSL Corp in September 2021 with a 5.359% stake but ceased to be a substantial shareholder a week later only to emerge again shortly after. It ceased to be a substantial shareholder on Feb 4, 2022, after selling 10.7 million shares on the open market. Then in April 2023, Cita Realiti became a substantial shareholder again, with 122.722 million shares, or 6.358% equity interest, after buying 21 million shares on the open market.

Notable movements

The Employees Provident Fund (EPF) took profit on its investment in Sunway Bhd when its share price rose recently, and ceased to be a substantial shareholder after disposing of 5.6 million shares on Nov 7. As at March 31, the retirement fund had an 8.51% stake in Sunway, according to the latter’s 2022 annual report.

The conglomerate’s share price has been on an uptrend, rising 30.77% over the past year. Closing at RM1.96 last Wednesday, it gave the group a market capitalisation of RM9.72 billion.

EPF was listed in Sunway’s 2022 annual report as having 63.72 million irredeemable convertible preference shares (ICPS), or 6.52% of the securities, as at March 31, 2023. The ICPS mature in December 2024 and 2025. Based on its filings with Bursa, it does not appear that the retirement fund has sold off its holdings of ICPS.

Over at Salcon Bhd, the emergence of Berjaya Corp Bhd as a substantial shareholder has got the market excited, sending the share price of the water and wastewater engineering group flying.

On Nov 2, BCorp emerged as a substantial shareholder of Salcon after acquiring a 5.43% stake. Following the acquisition of 55 million shares, the group is the third-largest shareholder in Salcon.

Subsequent to the first acquisition, BCorp continued to accumulate shares in Salcon via its various units, including Inter-Pacific Capital Sdn Bhd, buying 20.1 million shares in the water treatment group to bring its equity interest to 7.42% as at Nov 9. At press time, the latest filing on shareholding changes shows BCorp having 84.1 million shares, or a 8.31% stake, in Salcon as at Nov 10.

Salcon has been loss making in four of the last five financial years.

Investor interest in water stocks, including Salcon and Ranhill Utilities, could be attributed to Minister of Natural Resources, Environment and Climate Change Nik Nazmi Nik Ahmad telling parliament on Nov 1 that his ministry is submitting a proposal to the cabinet on a mechanism to set water tariffs. He reportedly said that if the proposal was adopted by the cabinet, water operators in every state would be allowed to determine their own mechanism for fixing water tariffs without referring to the federal government for approval.

Salcon’s share price had risen 127.42% y-o-y to close at 35.5 sen last Wednesday, valuing the group at RM359.4 million.

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