Foreign Investor Factor

Share prices of Kosmo Technology Industrial Bhd, Farm’s Best Bhd, MoBif Bhd and Iris Corporation Bhd fell sharply on Sept 19 after the US Securities and Exchange Commission and the Securities Commission launched probes into Aeneas Capital Management LP, which was among the largest investors in these companies.

Aeneas Capital Management LP, the hedge fund company run by former SAC Capital Advisors LLC money manager Thomas Grossman, is under investigation by regulators in the US and Malaysia after bets on Malaysian stocks caused losses of about 60 per cent in one of its funds, people familiar with the situation told Bloomberg yesterday. The US Securities and Exchange Commission (SEC) is examining Aeneas to determine whether it broke any securities laws, three people with direct knowledge of the inquiry said. In Kuala Lumpur, Aeneas is being probed for potential stock manipulation, said the people, who declined to be identified because the investigations aren't yet public.

Aeneas was among the largest investors in the four counters, in which its investment more than doubled this year. It lost money in stocks, including Iris and Farm’s Best, prompting Deutsche Bank AG to demand repayment of loans that finance the trades:

• IRIS
• Mobif
• Kosmo
• Farmbes

Do review the chain reactions from May to September. The selldown did not have a serious impact on the overall market sentiment, except for investors who had bought the stocks.