China Star Food shares and warrants shine

Singapore

THE stock of sweet potato snacks maker China Star Food enjoyed another good run on its second trading day on Thursday after its Catalist debut. Its warrants, which were issued free in relation to a compliance placement of shares to lift its public float, shot up in tandem.

On Thursday, the stock soared to 39 cents, 34.5 per cent higher than the preceding day's closing after a hefty 14.78 million shares changed hands.

Correspondingly, China Star W180417 warrants jumped 2.9 cents, or 90.6 per cent, to 6.1 cents. The exercise price for conversion of each warrant to a share is 33 cents.

The Fujian-based food products company had completed a S$168 million reverse takeover of cash company Brooke Asia in September last year and recently completed the compliance placement.

Dealers noted that the valuation of the compliance placement of 25.25 million shares at 23 cents apiece was on the low side, vis-a-vis the share price of what they said was 60.4 cents after the share consolidation. The stock opened trading on Wednesday at 23 cents. One broker felt that the placement price was made palatable for investors to take up the private placement. "And since the public listing came after the compliance placement, the placement price formed the base for the recent trading."