Stock With Momentum: Malaysian Resources Corp Bhd (MRCB)

This article first appeared in The Edge Financial Daily, on August 9, 2018.
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Malaysian Resources Corp Bhd (MRCB) (-ve)
Trading of the shares in Malaysian Resources Corp Bhd (MRCB) (fundamental: 0.8/3, valuation: 1.4/3) triggered our momentum algorithm as the counter jumped by 5.03% or four sen to close at 83.5 sen with about 123.92 million shares traded. Its market capitalisation stood at RM3.67 billion.

In comparison, the group’s 200-day average volume was only about 19.3 million shares.

The strong buying momentum came on the back of news that the government had confirmed MRCB George Kent Sdn Bhd would remain as the project delivery partner (PDP) for the light rail transit line 3 venture.

On Tuesday, Finance Minister Lim Guan Eng told Parliament the government would have to pay RM4.2 billion in compensation if the RM31.5 billion MRCB George Kent’s PDP contract was terminated.

MRCB was last traded at a trailing price-earnings ratio of 11.4 times, with a dividend yield of about 2.1%. The counter has lost about 18% of its value in the last one year.