All the 'Hope' penney stocks took a big dive.
Rowsley hit by penny stock jitters
Punters disappointed that recent deals have failed to lift the counter
Published on Oct 19, 2013 By Goh Eng Yeow Senior Correspondent
PUNTERS were disappointed that Rowsley, the firm controlled by former "remisier king" Peter Lim, failed to get much of a lift despite sealing two deals that will turn it into a big Malaysian property play.
Instead, the stock has been drifting downwards following the deals in recent weeks.
One move was to acquire RSP Architects Planners & Engineers, headed by businessman Albert Hong. The other involved buying 9.2 ha of land in Johor Iskandar belonging to a 70:30 joint venture between Mr Lim and the Johor royal family. Both transactions were completed nearly four weeks ago.
From a high of 65.5 cents three weeks ago, Rowsley slid to 56.5 cents before dropping 41 per cent to 33.5 cents a week later after adjusting for the 3.275 billion new shares it had issued at 15 cents apiece to pay for the acquisitions.
After that low, it inched up to 36 cents before tumbling 7.5 per cent this week to close at 31 cents yesterday.
![[Image: ROWSLEY%252020131019.png]](https://lh4.googleusercontent.com/-rEl8IZEOcOE/UmHnxoZo_KI/AAAAAAAABc8/0iBMm4x5AIE/s640/ROWSLEY%252020131019.png)
This is despite the spate of positive publicity it has attracted after unveiling details of its RM5.5 billion (S$2.2 billion) residential project in Johor.
Traders have offered a variety of reasons for the stock's lacklustre performance of late after what had been a good year for the counter.
While Rowsley can give itself a pat on the back for completing its transformation into a property play, sentiment in the wider market has soured considerably.
This was because of the massive sell-off in those other market darlings Blumont, LionGold and Asiasons, all down more than 90 per cent in two weeks.
One dealer said: "Traders who had bought into Rowsley may also have exposure to counters such as Blumont. It would not be surprising if they dump Rowsley to pay for their losses in other counters."
That said, Rowsley had surged about 5.7 times in price after traders ploughed into the counter since the firm announced the two deals in December.
Given the jitters over the other counters that had also enjoyed spectacular run-ups, some believe that the hype on Rowsley may be over for now.
"It may well turn into a fairly quiet and slow trading stock," said another dealer.
Dealers suggested that another reason for the modest play in Rowsley was the switch in traders' interest to the warrants that were issued to existing shareholders as part of the package to complete the two acquisitions.
Rowsley gave two free warrants for every share held by its investors. Each warrant gives its holder the right to buy one Rowsley share at 18 cents over the next three years.
"With 1.9 billion warrants in the market, punters who want exposure to Rowsley's Iskandar play may decide on the warrants rather than the mother shares," said a dealer.
Rowsley warrants ended 0.2 cent up at 12.3 cents yesterday.
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