Will the reduced par value and higher share price attract new institutional investors or affect existing shareholder sentiment?

Impact on Institutional Demand & Shareholder Sentiment

The 1‑for‑60 reverse split will lift Graphjet’s quoted price roughly 60 times (ignoring any market reaction) and the par‑value change from $0.0001 to $0.006 is purely an accounting adjustment – it does not affect cash flows or earnings. What does change is the per‑share price perception: a $0.05‑$0.10 stock is far more “acceptable” to large‑cap and quantitative funds that have minimum price filters (e.g., $0.05 / $0.10). Consequently, the consolidation can clear a technical hurdle that previously kept some institutional managers on the sidelines, opening the door for fresh inflows once the post‑split price stabilises.

From a sentiment standpoint, existing shareholders often view a reverse split as a “clean‑up” move, especially if the low‑price regime has been associated with thin liquidity and higher volatility. In the short‑run we can expect a modest price bump on the effective‑date announcement and a spike in volume as investors reposition. However, institutional buying is driven by fundamentals – revenue growth, margins, and the company’s strategic positioning – not by par‑value. If Graphjet’s underlying metrics remain unchanged, the longer‑term shareholder sentiment will be dictated by how the market digests the new price level and whether the higher‑priced shares improve index eligibility and coverage by sell‑side analysts.

Actionable Take‑aways

1. Short‑term trade: Anticipate a modest upside on the consolidation date, followed by a pull‑back as the market digests the new price. A tight‑range, low‑volatility entry point 5‑10 % below the post‑split opening price could be used for a short‑term long position.
   
2. Institutional watchlist: Look for a rise in institutional ownership filings (13‑F, 13‑D) over the next 4‑6 weeks. An uptick in coverage upgrades or inclusion in larger‑cap indices would signal the “new investor” effect.
   
3. Long‑term view: The reverse split alone won’t materially improve valuation. Maintain focus on Graphjet’s earnings trajectory and cash‑flow outlook; only if those fundamentals are strong will the higher share price translate into sustained institutional interest and a durable boost in existing shareholder sentiment.