AbaCore doesn’t know foreign firm buying up its shares

AbaCore Capital [ABA 0.99 unch; 89% avgVol] [link] was asked by the SEC to comment on a March 5 article in BusinessWorld [link], entitled “AbaCore secures $1.6-M investment from Singapore-based firm”. In the article, BusinessWorld quoted ABA talking about the Singaporean investor as being “long-term oriented” and based in “emerging Asia”. ABA also mentions that the investor bought $1.6 million (~P94 million) worth of ABA shares, and plans to buy up to $4 million (~P234 million) more. In its clarification to the SEC, however, ABA struck a different tone. ABA said that the transaction didn’t involve primary shares or treasury shares, saying that “it appears that it involves the purchase of shares by investors from shareholders of ABA at the time in the open market.” ABA said that it “ had no knowledge nor participation in said investment decision of the parties involved”, and had “no direct involvement, participation, or solicitation in the BusinessWorld article”. The company said it is “pleased to hear that a group of foreign institutional investors invested in the shares of Abacore through the facilities of the PSE.”

MB bottom-line: Gives off all sorts of weird vibes to me. ABA is something of a backwater stock, and it’s not the sort of thing that foreign investors are usually eager to get involved with when they come to the Philippines looking for undervalued stock plays. I’m not saying that ABA is being untruthful in its careful statement to the SEC, but it does feel like they knew an awful lot more about the transaction outlined in the March 5 article than they’re willing to talk about now in this clarification to the SEC. To what end, I’m not sure. I’m just going to ignore all the tinfoil hat possibilities here and say that the “Singaporean investor” is probably not excited about being down 18% in just three months. 

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