KUALA LUMPUR: TM International Bhd (TMI) jumped over 11% on March 23, its biggest one-day gain since its debut 11 months ago, ahead of a shareholders meeting this morning that will vote on its planned RM5.25 billion rights issue and proposed name change to Axiata Group Bhd.

The stock ended higher for the third straight day, gaining 26 sen or 11.06% to RM2.61 at closing bell, just one sen off its intra-day high.
 
The last time TMI saw a similar jump in its price was a 10% gain on Sept 19 last year when Japan’s NTT DoCoMo bought a 30% stake in TMI Bangladesh (Aktel). TMI added 11 sen on March 20 and eight sen on March 19.

On March 19, some brokers including OSK Research, told clients that TMI shares had likely bottomed after the stock dipped to as low as RM2.13 on March 17. That’s 93 sen or 30% below the RM3.06 TMI close when the exercise was first announced on Feb 26.

TMI tumbled the past three weeks due to uncertainties surrounding the final pricing and the ratio of the proposed cash call, given that details will only be forthcoming on March 27. The reason behind the lack of details on the exercise may be something shareholders might want to ask the board on March 24.

Another issue is the implication of TMI facing a free-float issue should the company’s three largest shareholders — Khazanah Nasional Bhd, the Employees Provident Fund Board and Amanah Raya Nominees Sdn Bhd — end up taking up the bulk of the rights shares.

On a brighter note, some stock traders pointed out late last week that TMI’s share price would see support ahead of the price fixing for its rights shares, where its five-day volume weighted average price (VWAP) is an important determining factor.

There has been speculation in the market that the TMI board would choose a ratio that does not maximise dilution for minority shareholders, recent right shares pricing as well as the floor pricing of RM1 for the rights.

TMI’s gains on March 23 boosted the Kuala Lumpur Composite Index (KLCI) by 1.81 points. TMI was the day’s fourth leading mover after Sime Darby Bhd, IOI Corp Bhd and Malayan Banking Bhd. With 22.09 million shares changing hands, TMI was the third most actively traded stock, behind KNM Group Bhd and Resorts World Bhd.

A Bloomberg report, citing a share sale term sheet from bankers, reported that the TMI rights shares would be on sale from April 15 to April 29.