This article first appeared in The Edge Financial Daily on January 24, 2019

KUALA LUMPUR: Mesiniaga Bhd’s shares soared again yesterday, bringing its market value gain to RM25 million in just two days as investors continued to react positively to its RM1.9 billion contract with Xiddig Cellular Communications Sdn Bhd for the EM-IIG (Enhanced Malaysia International Internet Gateway) project.

The shares rose 25 sen, or 16.67%, to RM1.75 yesterday, bringing a market capitalisation of RM105.7 million, after trading to as high as RM1.93 during the day. It hit limit-up on Tuesday to RM1.50 — the highest since February 2015.

A total of 1.6 million shares crossed hands yesterday, significantly higher than its 200-day average trading volume of 13,842.5 shares.

The excitement in its shares has shifted the sentiment on the information technology services provider, which had been seeing sideway movements since August 2016. Prior to that, its share price saw a two-year downtrend and touched a seven-year low of 76.3 sen on Aug 2, 2016.

On Jan 18, the company announced that it had accepted a letter of award from Xiddig for the commissioning of the core, metro distribution and access network with related support systems for the EM-IIG project.

It is worth noting that the RM1.9 billion contract value is almost 18 times the size of Mesiniaga’s market capitalisation and is likely to be one of the largest single contracts, if not the largest, that the company has secured since its listing in November 1999.

The award followed another RM27.4 million contract from Xiddig, which was secured in December last year for the delivery of laboratory equipment and site readiness preparation for the EM-IIG project service testing and verification.