KUALA LUMPUR (May 25): My EG Services Bhd (MyEG) was the second most actively traded counter on the local bourse today, after tumbling 13% yesterday, on rumours that the local graft-buster agency had raided its head office and detained all of its directors.
At 3:41pm, MyEG saw 87.82 million shares, equivalent to 2.44% of its share capital, exchanging hands. Since the opening bell, the stock has fallen 4.5 sen or 5.66% to 75 sen as of writing, giving it a market capitalisation of RM2.7 billion.
It is worth noting that since the historic 14th general election on May 9, MyEG, which was perceived to be linked to the previous Barisan Nasional government, has seen RM6.6 billion wiped out from its market capitalisation.
According to UOB Kay Hian Securities (M) Sdn Bhd, MyEG has been suffering from intense selling pressure as a result of malicious rumours that the Malaysian Anti-Corruption Commission had raided its head office, while the entire board of directors have been arrested.
"Based on our channel checks with management, the rumour was baseless and untrue. They have also guided that all operations are 'business as usual'," UOB Kay Hian analyst Vincent Khoo said, adding that the allegations hurled at MyEG were "malicious" and "baseless".
Meanwhile, UOB Kay Hian said MyEG had recently secured a new project for the electronic bidding system for special series vehicle number, which is currently implemented by the Road Transport Department.
"While information pertaining to the new contract is limited at this juncture, we view it positively and believe that it acts as a restatement that MyEG has not lost traction with the new government," UOB Kay Hian added.
For now, UOB Kay Hian has kept its "buy" call and 12-month target price of RM1.06, which was based on 12.7 times forward price-earnings (PE) ratio, amid the current market uncertainty.
"Our assessed trough valuation is 84 sen per share, based on 10 times FY19F (forward) PE," UOB Kay Hian added.