KUALA LUMPUR (Oct 8): Gamuda Bhd and MMC Corp Bhd shares fell among Bursa Malaysia top decliners following news reports the federal government will retender all the unfinished underground work of the Mass Rapid Transit Line 2 (MRT2) project.

This follows the cabinet's decision to terminate the underground work contract of the MRT2 with MMC Gamuda KVMRT Sdn Bhd, a joint venture (JV) between Gamuda and MMC. At 5pm, Gamuda shares were down 78 sen to settle at RM2.43 while MMC dropped 22 sen to close at RM1.13.

Bursa said in a special announcement today proprietary day trading (PDT) and intraday short selling (IDSS) of Gamuda and MMC shares have been suspended for the rest of the day. This is because the last done price of the approved securities dropped more than 15 sen or 15% from the reference price.

"The PDT and IDSS activities will only be enabled the following trading day, i.e. Tuesday, 9/10/2018 at 08:30 am," Bursa said.

AmInvestment Bank Bhd analyst Joshua Ng said in a note today: "Based on our estimates, the termination will mean a loss of contract to MMC-Gamuda of up to RM10.53 billion or 63% of the original contract of RM16.71 billion, while for Gamuda's half share, it will be up to RM5.26 billion or 63% of the original value of RM8.36 billion."

Ng said AmInvestment downgraded its call for Gamuda shares to underweight from hold with a reduced fair value of RM2.71 from RM3.34.

Affin Hwang Investment Bank Bhd analyst Loong Chee Wei wrote in a note today Affin downgraded its Gamuda share call to sell from hold with a reduced target price of RM2.55 from RM3.46.

"The government has decided to terminate MMC Gamuda JV's MRT2 underground contract. This comes as a surprise as we only expected the contract value to be reduced," Loong said.