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Hot stock: F J Benjamin says no undisclosed information as share surge to 2-year high

F J BENJAMIN (FJB) Holdings is unaware of any undisclosed information which could explain a spike in its share price on Tuesday, the fashion retailer said mid-session in response to a trading query by the Singapore Exchange (SGX).

The counter was up about 31.88 per cent at 9.1 Singapore cents at 10.46am on Tuesday when the Singapore market regulator issued its query in response to the stock's unusual activity.

As at 3.36pm, the company's share price was still on a tear, trading up 39.13 per cent at 9.6 Singapore cents.

The last time the stock touched that level was two years ago, on Oct 29, 2015.

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FJB said in its response to SGX's query that it was not aware of any undisclosed information that could account for trading activity in the stock.

It noted, however, that it had announced on Oct 23 a rights and warrants issue to raise up to S$39 million.

FJB's proposed offer of three rights shares for every five existing shares held could raise about S$12 million through the issue of 341.2 million new shares at S$0.035 each.

The company has also proposed to issue two free warrants for each rights share, or a total of 682.5 million warrants. The warrants have a three-year exercise period, and will have an exercise price of 4 Singapore cent per warrant. If fully exercised, it will raise another S$27 million.

The theoretical ex-rights price for the stock is 4.125 Singapore cents.

In its latest earnings report, FJB reported that its net loss for the fiscal year ended June 30 narrowed to S$17.42 million from S$22.96 million amid a drop in revenue. The group's turnover slipped 18 per cent to S$207.49 million mainly due to the discontinuation of businesses and a decrease in sales to an Indonesian associate.

The loss-making retailer has been on the SGX watch-list since December 2016 for sustaining pre-tax losses for more than three consecutive financial years and having a market capitalisation below S$40 million.