KUALA LUMPUR (May 18): MY EG Services Bhd (MyEG), which came under intense selling pressure since the end of the general election, rebounded and emerged as the most actively traded counter on the local bourse this morning, after its top brass recently come out to say that the company has a first-mover advantage.
Since the local bourse’s opening bell today, MYEG saw 108.05 million shares exchanging hands, equivalent to 3% of its share capital. This morning, the counter opened at RM1, and jumped by as much as 3%, before paring down its gain to 95.5 sen at 10am today, for a market capitalisation of RM3.44 billion.
Since the conclusion of the 14th general election on May 9. MYEG, which was perceived to be linked with the ousted Barisan Nasional-led government and involved in a goods and services tax (GST)-related projects, has fallen by 63.91%, with RM5.8 billion wiped out from its market capitalisation.
The stock is currently trading at the lowest point, since the last 2.5 years, according to Bloomberg data.
Yesterday, MYEG group managing director Wong Thean Soon was reported to have told analysts in a close-door meeting and defended the stock as having a first-mover advantage, which is a huge plus point that will enable it to compete efficiently and effectively in the electronic government services sector.
“Do I think we [MYEG] can work with the new government? Yes, I think we can. I believe we can establish a good relationship. MyEG is one of the government's flagship MSC [multimedia super corridor] projects and I think we are probably the only one still left,” Wong was quoted as saying.
“Remember that MSC is Tun Dr Mahathir Mohamad’s initiative. I cannot proclaim that this is rocket science but it takes time, operational time to put things in place,” he had added.
Meanwhile, Credit Suisse Securities Malaysia Sdn Bhd was reported to be the latest investment firm to join CIMB Investment Bank Bhd to downgrade MYEG shares to “underperform” from “neutral”, and slashed the 12-month target price to 90 sen, from RM2.70 previously.
On May 13, an analyst at CIMB has told its clients that it has downgraded MyEG to “reduce” from “hold”, as the company is at risk of losing future earnings from its GST monitoring project, in which the tax is expected to be scrapped by the newly-formed government over the next 100 days.