In a strategic move that signals confidence, Retirement Fund Inc (KWAP), Malaysia’s esteemed public sector pension fund, has escalated its position to become a substantial shareholder in CTOS Digital Bhd. This development unfolds against the backdrop of significant market turmoil experienced by CTOS, following an adverse legal ruling that sparked widespread investor concern.
According to recent stock exchange disclosures, KWAP acquired a substantial 28.81 million shares on the open market, enhancing its total holdings to an impressive 135.51 million shares. This acquisition elevates KWAP’s stake in CTOS to a notable 5.87%. Concurrently, in a twist of market dynamics, the fund manager associated with KWAP also divested 1.37 million shares, slightly reducing its position to 134.14 million shares, or a 5.81% stake in the company.
The credit reporting agency’s share price experienced a precipitous drop, momentarily dipping below its initial public offering benchmark of RM1.10. This decline was a direct reaction to the revelation of a judicial verdict which determined that CTOS lacked the legal authority to create credit scores. The ruling’s implications ignited investor apprehension regarding the potential impact on CTOS’s core service offerings.
Despite the initial shockwave, CTOS management swiftly addressed the concerns, affirming that its operations would proceed as usual. They reassured stakeholders that the High Court’s decision did not impede the company’s ability to continue providing credit scores.
The stock witnessed a dramatic plunge, dropping by up to 27% to an intraday low of RM1.06, before recouping some of its losses to close at RM1.25, marking a 14% decrease for the day. Remarkably, this recovery signals an 18% increase from the day’s lowest point.
The subsequent trading session saw a continuation of the recovery trend, with CTOS’s shares reaching a peak of RM1.32, ultimately settling at RM1.28 by the close. This adjustment translates to a modest gain of three sen, or 2.4%, thereby valuing CTOS at an estimated RM2.96 billion.
This series of events underscores KWAP’s robust faith in CTOS Digital’s fundamental strengths and long-term potential, even amidst legal predicaments and the inherent volatility of the financial markets.
