Sunway dips 3% on report Singapore's GIC selling stake

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KUALA LUMPUR (Nov 5): Sunway Bhd fell 11 sen or 3.28% on reports that Singapore-government investment arm GIC Pte Ltd (GIC) will sell its stake in the property and construction group.

At 4.08pm, Sunway fell to RM3.24 with some 1.5 million shares traded. Comparatively, the FBM KLCI fell 6.96 points or 0.4%.

GIC owns an 8.74% stake in Sunway, according to Sunway's statement to Bursa Malaysia.

Sunway was one of The Edge Markets’ pick for Stocks with Momentum yesterday. 

Reuters, quoting a term sheet, reported the GIC was selling 7.26% of its stake in Sunway worth more than RM400 million.

It was reported that the shares were being priced between RM3.20 and RM3.30 each. Following the share sale, Reuters reported the GIC would cease to become a substantial shareholder in Sunway.

A remisier with a local investment bank said the decline in Sunway's share price presented a “good buying opportunity” for those looking to accumulate the stock.

The remisier said Sunway was deemed undervalued.

“When foreign funds sell shares in big volumes, it is very normal for retailers to follow suit.

"But, Sunway is fundamentally strong and is only trading at a price-earnings ratio (PER)of around three to four times and this means it is slightly undervalued,” he said.

Bloomberg data showed that Sunway's PER compared with a sector average PER of about 20 times.