MyEG shares surge, top active counter in morning session

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KUALA LUMPUR (July 16): Shares in My E.G. Services Bhd (MyEG) rose as much as 6% in early trade today to hit its intraday high of 96.5 sen. The stock pared some of its gains to close the morning session up 5.5% or 5 sen at 95.5 sen, with 42.2 million shares changing hands – making it the most active counter on Bursa Malaysia.

Last Thursday, CIMB Research wrote in a note to clients that a meeting between the e-government provider’s managing director, Wong Thean Soon, and 16 institutional clients in Singapore had revealed two positive surprises – commencement of remittance services next month and the plan to start operations in Bangladesh by the end of this year.

The research house has an “add” call on MyEG, with an unchanged target price of RM1.22 on the back of these two positive developments.

Shares in MyEG have seen a sharp decline following the 14th general election, as most investors view the group as being linked to the previous government. The group’s share price has lost 55.3% over the past year.

However, the correction has made the stock’s valuation looks attractive. According to CIMB’s senior analyst Nigel Foo, the stock is not expensive at 10.8 times its price-earnings ratio based on calendar year 2019’s earnings forecast.