KUALA LUMPUR (July 25): E-government service provider MyEG Services Bhd rose as much as 9 sen or 4.81% to RM1.96 today, on what is seen as a technical rebound.

The counter saw 8.53 million shares traded as at 2.50 p.m.

Raymond Foo, a remisier at the Alliance Investment Bank, said MyEG had dropped previously, and the rise today is probably a technical rebound.
However, he believes the share price of MyEG will continue to hover around the RM1.80-RM1.90 level.

“It is true that the services provided by MyEG are exclusive, but its PE [price to earnings ratio] is still very high. I think its valuation is expensive and it is risky to invest in MyEG,” Foo told theedgemarkets.com.

The share price of the e-government service provider hit its 7-month low of RM1.72 on July 15, but gradually climbed back up to close at RM1.87 yesterday.

Year-to-date, MyEG has declined 9.72%.

According to Insider Asia, MyEG is trading on a trailing 12 month PE of 39.13 times.

MyEG attracted the trading interest of investors since early July, with its volume rising to almost 34 million shares on July 11, after lower turnovers in May and June. For comparison, the trading volume for the past 200 days was 7.73 million shares.

Foo said it is not clear if the incorporation of a new subsidiary, MyEG Lodging Sdn Bhd, to build and operate hostels for foreign workers can contribute to the earnings of the company.