Illogical Powernet share rise

THE euphoric rise of the share price of Kumpulan Powernet Bhd , a nondescript company that is into the manufacturing of warp knitted fabric and property development, took the market by surprise.

The stock that normally draws little attention has seen its share price more than double in the last one month from about 30 sen to more than 80 sen. Upon a query by Bursa Malaysia, the company announced that a substantial shareholder of the company is in negotiations to dispose the shares to a potential buyer.

Based on the announcement, there is no indication of the potential sale involving a block that is big enough to warrant a takeover of the company. It also does not indicate if the proposed transaction would cause the loss-making company to turn around.

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