Samling shares fall to new all-time low
The shares of Samling Global, a Hong Kong-listed Malaysian timber group, have fallen to a new all-time low. Yesterday, they lost 20 percent of their value, closing at 0.50 Hong Kong Dollars. Today, they have lost another 9 percent, reaching 0.45 Hong Kong Dollars at closure. The drop in value comes a week before a board meeting at which last year’s results will have to be approved for publication.
Due to the recent decrease in the price and increase in the trading volume during the last days, the Hong Kong Stock Exchange requested the timber group to comment on the movements. Samling issued a statement on 9 September 2008, commenting that the company was “not aware of any reasons for such price decrease and trading volume increase.”
After having peaked in July 2007, Samling shares have lost over 80 percent of their value. Investors who bought Samling shares at the time of the company’s listing in March 2007 for 2.08 Hong Kong dollars have lost over 75 percent of their investment.
Samling was publicly listed in March 2007 at the Hong Kong Stock Exchange. Credit Suisse, HSBC and Macquarie Securities acted as joint bookrunners. At the time, an international NGO coalition warned investors to shun Samling shares because of the company’s role in tropical rainforest destruction, its non-respect of indigenous communities and its track record in illegal logging.
Samling’s main logging interests are in Guyana and the East Malaysian State of Sarawak. In late 2007, Samling was fined by the Guyanese government for its involvement in large-scale illegal logging.
Without inside knowledge of the company, we can only speculate on the reasons for the dramatic share fall of the last weeks. Certainly, the latest political developments in Malaysia have not been helpful for the group which is said to maintain close ties to top politicians of the ruling Barisan Nasional Coalition. However, it appears that other factors must have contributed to investors losing their confidence in Samling.
(10 September 2008)
Link to Samling website
Link to Hong Kong Stock exchange stock quotes
