iFast plunges 8.5% after Temasek-linked shareholder offloads S$131 million worth of shares

Shares of iFast plunged on Tuesday (Aug 19), as substantial shareholder CP Invest – a subsidiary of Temasek-owned Cuscaden Peak Investments – reduced its stake in the company.

The counter was down 11.3 per cent or S$1.11 at S$8.66 as at 9.09 am, after closing at S$9.77 the previous day.

This was iFast’s biggest drop since Apr 28, with the stock nearly up 20 per cent in the year to date.

It pared some of the losses over the day to close 8.5 per cent down at S$8.94, with nearly 23.2 million shares having changed hands.

CP Invest sold about 14.4 million iFast shares at a 6.7 per cent discount to the previous day’s closing price, worth about S$130.9 million.

Morgan Stanley and UBS arranged the deal, said iFast in a bourse filing on Tuesday.

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It added that this meant CP Invest’s stake in iFast would shrink from about 9.6 per cent to 4.9 per cent. This means CP Invest will cease to be a substantial shareholder of iFast.

CGS International analyst Tay Wee Kuang said investors are likely taking this as a sign that iFast is “fairly valued” at S$9.77.

He added that it is likely that they are taking in profit, especially after iFast’s strong second-quarter results and run-up in recent months.

“(CP Invest) still have 15 million shares, which some investors may view as an overhang to the share price as they could sell it at a lower price going forward if they want to monetise their stake quickly.”.

Prior to the latest block deal, CP Invest also pared its iFast stake in January and February.

Tuesday’s sell-off comes a day after iFast Pay Malaysia, a Malaysia-incorporated subsidiary of iFast, received in-principle approval from Bank Negara Malaysia to operate as an electronic money issuer and hold a Money Services Business Class A licence.

Both DBS and CGS International reiterated calls to “buy” and “add” on Jul 29, with target prices of S$10 and S$9.20, respectively, after iFast’s Q2 results.

The approval was described as a “regulatory milestone” by the subsidiary on Monday.