Pentamaster, Shariah funds ready to pounce [$$bill]

Pentamaster shares may get a boost next week when it gets included in the list of Shariah-compliant securities.

FYI, the list of Shariah-compliant securities is announced in the final week of May and November.

We could see the reverse effect of what happened on 29 Nov 2019 if Islamic/Shariah funds rush in to buy this top-rated tech stock that is a darling among fund managers and analysts.

Investors may recall 29 Nov 2019, the day when Penta tumbled 20% intraday after it was excluded from the list of Shariah-compliant securities (first time since Penta’s listing in 2003):

Penta collapsed to as low as RM3.74 from its previous day close of RM4.69, while volume surged with 137 million shares traded. It was said that Islamic/Shariah unit trust funds had to sell down Penta to comply with their Shariah investment mandate.

Source: https://www.thestar.com.my/business/business-news/2019/11/29/quick-take-pentamaster-falls-91-in-active-trade

Also read: Pentamaster active, tumbles on exclusion from shariah-compliant list (https://www.theedgemarkets.com/article/pentamaster-active-tumbles-being-exclusion-shariahcompliant-list )

Islamic/Shariah UT funds were among top investors in Penta. They collectively held about 30 million shares (as at 5 Apr 2019) as per 2018 annual report:

Now, a look at Penta’s latest 2019 annual report shows that these Islamic/Shariah funds are no longer invested:

I wouldn't be surprised at all if they re-emerge as top shareholders once Penta becomes Shariah-compliant again.

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Disclaimer: All information here reflects the author’s personal views/thoughts and should not be considered as investment advice. It is very important to do your own analysis before making any investment based on your own personal circumstances. No content here constitutes - or should be understood as constituting - a recommendation to enter in any securities transactions.

#PENTA