KUALA LUMPUR (Dec 21): As some licensed proprietary traders are trading for direct gain instead of commission dollars, shares of restaurant proprietor Oversea Enterprise Bhd surged 20% or 2.5 sen to 15 sen from 12.5 sen as of 12.22pm today (Friday), with 9.95 million shares done.
SJ Securities senior remisier Goh Kay Chong advised investors to be cautious when doing trading by proprietary traders.
"Oversea is in the restaurant business, making over RM1 million in profit for the last two years. While it is a famous restaurant chain, this may just be a concept play as the players feel that restaurant business might be doing well during the festive season," he said in an email sent to theedgemalaysia.com
The ACE market-listed company made RM1.085 million in net profit for its financial year ended Dec 31, 2011 (FY2011). On the previous financial year (FY2010), it chalked up a net loss of RM324 thousand.
Oversea's shares averaged at 12.7 sen in the past 52 weeks, reaching its high of 17 sen on March 27. On this date last year, it attained its 52-week low share price of 11.5 sen.
"This stock hardly traded any volume before Dec 19. They were some acculumation at 12 sen on Dec 19 and Dec 20. Suddenly, the volume just came in this morning and the price went up to as high as 16.5 sen, a gain of 37.5% just within three market days," said Goh.
He also surmised that Oversea may just be played up by the 50-odd licensed proprietary traders in town. He said these traders play for direct gains instead of commission dollars.
"Once they made some money, they might just turn to other stocks," he said.
Goh also said it might not be easy to get out of the stocks once after the price had surged.
"It's fun to make money. But it'll be frustrating when you start to lose them. Be extra careful."