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Hot stock: Foreland FabricTech surges despite SGX warning
Shares of Chinese textile supplier Foreland FabricTech leapt by as much as 100 per cent on Tuesday morning despite a "trade with caution" warning from the Singapore Exchange before the market opened.
Foreland FabricTech shot up from Monday's closing price of 2.8 Singapore cents to as high as 5.6 Singapore cents at 9.30am on Tuesday before slipping down to about 5 Singapore cents by 10.30am.
The mainboard-listed penny stock was the most actively traded on the Singapore Exchange (SGX), with about 123 million shares having changed hands as at 10.30am.
The number of shares traded on Tuesday morning surpassed the counter's daily traded volume of 74.8 million on Monday, which had already been large enough to prompt a query from the exchange.
The SGX said on Tuesday morning that it had asked the company about the "substantial increase" in its traded volume on Monday, to which the company had replied later that day that it was "not aware of any reasons" for the unusual trading.
The counter's 2.8 Singapore cents finish on Monday was also more than double its closing price of 1.3 Singapore cents on the previous trading day, which was last Thursday. Friday was a public holiday.
The price surges on Monday and Tuesday follow a change of control at the Fujian-based company.
The company's executive chairman Tsoi Kin Chit slashed his shareholdings in the company last month to just 11.03 per cent after selling a 29.5 per cent stake, or 160,619,700 shares, for S$1 million in an off-market transaction on June 18, according to an SGX filing. The price worked out to 0.62 Singapore cents per share.
Foreland FabricTech said in a June 26 statement filed on the SGX that Mr Tsoi had sold that stake to a woman named Huang Wen in order to get cash for his other financial needs, but would still make decisions for the company.