Corporate  |  FEBRUARY 20, 2013 1:33PM

RHB buys 24 million Tune Ins shares to stabilise price

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RHB Investment Bank, which is permitted to buy to buy Tune Ins Holdings Bhd (TIH) if its share price fell below its initial public offering (IPO) price, has accumulated 24.33 million shares at RM1.33 -RM1.35 on the opening day of trading.

This amounted to about a quarter of the 101 million shares traded Wednesday.

tune-insuranceUnder a “greenshoe” option, RHB could buy back from the open market 31.5 million shares over 30 days, as long as the price purchased is not more than RM1.35.This means that RHB has used up almost 75 percent of this option on the shares first day out. The shares that it buys is placed back to funds at the IPO price.

TIH’s shares opened at a high of RM 1.38, five cents above its IPO price before easing to trade lower at RM 1.33. The shares bounced up to close at RM1.36, just a sen higher than the price at which it had sold 37.59 million shares to the public a few days before.  The shares changed hands from RM 1.33 to RM 1.38.

RHB’s heavy buying indicates that share prices may have gone lower if not for the price stabilisation mechanism put in place by the green shoe option. The share was earlier said to be oversubscribed by 2.07 times.

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