Shares in Chartered Semiconductor Manufacturing have sunk again amid investor concerns about the chip-maker's management, a looming rights issue and widespread disaffection with the technology sector.
The world's third-largest contract chip-manufacturer saw its stock slide 3.9 per cent yesterday to close at a record low of 98 Singapore cents. The drop takes the decline since the start of the year to 80 per cent.
The plunge in value presents a potent challenge for Temasek, the Singapore government's main investment arm. The finance ministry unit controls 60.5 per cent of Chartered Semi through Singapore Technologies (ST), a state-linked defence conglomerate.
'We can't ignore the way the management of the company has punished its own stock,' said Warren Lau, analyst at HSBC Securities in Taipei.
'Most institutional investors have given up on the stock. It's probably now left with the retail players.'
Chartered Semi stunned the market on September 2, announcing an eight-for-10 rights issue priced at a heavily discounted S$1 per share to raise a net S$626 million (about HK$2.74 billion). The move was the third fund-raising in as many years and came despite assurances from the company last month that it had sufficient cash on hand to fund planned expansion. Before the announcement, Chartered Semi traded at S$2.10. Since then its stock price has more than halved.
Analysts said selling pressure had been augmented by a warning from the company on September 16 that it would fail to hit fourth-quarter revenue targets due to softening consumer demand.