Malaysia’s NationGate shares nosedive 30% before rebounding amid Singapore’s Nvidia chip fraud probe
It clarifies that it is not involved in the ongoing Singapore investigation
[KUALA LUMPUR] Malaysia’s NationGate was caught in the fallout of Singapore’s investigation into the alleged fraudulent transfer of Nvidia’s advanced artificial intelligence (AI) chips, sending its shares crashing nearly 30 per cent on Monday (Mar 3) before trading was halted for an hour on Tuesday.
Trading volume of the electronics manufacturing service provider, one of the most actively traded stocks on Bursa Malaysia, surged to nearly 49 million shares as investors rushed to offload the stock on Monday. The losses wiped out gains the counter made since December 2023 as it rode on the AI wave.
In response to an Unusual Market Activity query from Bursa Malaysia late Monday, NationGate distanced itself from the probe, clarifying that it it is not involved in the ongoing Singapore investigation concerning the alleged fraudulent movement of Nvidia chips.
Singapore’s authorities on Monday charged three individuals with fraud, alleging they misrepresented end-users of Dell and Super Micro servers containing Nvidia chips. The servers were shipped from Singapore to Malaysia, and investigators are now determining whether Malaysia was the final destination or merely a transit point.
Singapore’s Minister for Law and Home Affairs K Shanmugam emphasised that the probe was conducted independently and not at the request of the US, despite speculation about links to US export controls.
NationGate said in a statement: “We understand that the matter pertains to a company that is a Nvidia cloud partner and is not connected to our group… We remain committed to transparency and compliance with all relevant regulations and will continue to monitor the situation closely.”
The episode highlights investor jitters over potential regulatory scrutiny and its ripple effects on companies in Nvidia’s supply chain.
Share price rebound
By Tuesday, the stock regained some ground after opening nearly 8 per cent higher at RM1.40 and briefly surging as much as 28 per cent to RM1.66, making it one of the top gainers and most actively traded stocks of the day. It was trading at around RM1.46 at about 11.45 am.
At market close, shares of NationGate settled at RM1.45, up 15 sen or 11.5 per cent, with 164 million shares changing hands.
Kenneth Leong, head of research at Apex Securities, said Tuesday’s sharp recovery suggested Monday’s sell-off was a knee-jerk reaction driven by market fear.
“Despite NationGate being a supplier and trading partner of Nvidia, there is no concrete evidence linking it to the fraudulent case,” he said, though he advised investors to remain cautious and monitor developments.
Penang-based NationGate reported record earnings last Thursday, fuelled by strong demand in its data computing segment, which includes assembling AI servers for Nvidia. Net profit for the fourth quarter jumped to RM64 million (S$19.3 million) from RM15.9 million a year earlier, while revenue soared to RM3 billion from RM171.6 million.
NationGate, which debuted on Bursa Malaysia’s Ace Market in January 2023, moved to the Main Market in May 2024. As at Tuesday, its market capitalisation stood at nearly RM3.6 billion.
Meanwhile, Malaysia’s Ministry of Investment, Trade and Industry said late Monday it is investigating claims that Nvidia chips were moved from Singapore to Malaysia. The ministry said it would provide further comments once more details emerged.
