KUALA LUMPUR (July 13): CIMB Investment Bank Bhd said investors were concerned about Vivocom Intl Holdings Bhd's joint chief executive officer (CEO) Datuk Seri Dr Yeoh Seong Mok's position in the construction firm.
 
In a note today, CIMB analyst Marcus Chan said the view was based on feedback from retail, high-net worth and institutional investors.

"Feedback from speaking to retail, high-net worth and institutional clients, reveal that investors’ immediate focus will be on the uncertainty surrounding CEO Dr Yeoh’s position in Vivocom.

"We believe that this should be made clear to investors to lift the overhang on near-term sentiment on the stock, as there has been a great deal of speculation on the reasons for his potential early retirement," Chan said.

CIMB's note was in response to Vivocom’s proposed bonus share issue. Yesterday, Vivocom said it planned to issue up to 870.31 million new bonus shares, on the basis of one bonus share for every four existing units held.

Today, Chan said CIMB was "neutral" on Vivocom's bonus issue, "as the stock is already very liquid."

“While bonus issues typically boost retail investor interest in a stock that suffers from a lack of trading liquidity, Vivocom does not have this problem. At the existing share base of 2.6 billion shares and a 57% free float, it is frequently already on the top 10 in terms of volume on Bursa Malaysia,” he said.

Vivocom was the most actively-traded counter on Bursa Malaysia at 12:30 p.m., with a trading volume of some 64 million shares. Vivocom shares settled flat at 25.5 sen, for a market capitalisation of RM647.5 million.

Chan said CIMB maintained its "add" call on Vivocom shares, with an unchanged target price of 78 sen.