KUALA LUMPUR (April 10): Shares of My E.G. Services Bhd (MyEG) staged a relief rebound at mid-morning today after the selldown over the last two days following the government's announcement that it would be looking at an alternative platform for the renewal of foreign work permits (FWPR) that is currently being offered by the company.
At 10.37am, MyEG (fundamental: 3.0; valuation: 1.1) rose 0.38% or 1 sen to RM2.61 with 4.01 million shares done.
Earlier on Wednesday, the Home Affairs Deputy Minister Datuk Wan Junaidi Tuanku Jaafar said that the government was looking at an alternative platform currently monopolised by MyEG following complaints raised over the RM38 processing fees recently.
Meanwhile, CIMB analyst Nigel Foo in a note on Wednesday said that the news came as a negative surprise but he was not too concerned.
"Even if there was a new player for the FWPR services, it would take 3–4 years to get the necessary approvals from the authorities and by then, MyEG would already have a huge first mover advantage," he added.
In addition, in Jan 2015, Foo pointed out that the authorities appointed MyEG to set up and maintain a database on the legal and illegal foreign workers, and the company is able to do this using its online FWPR services.
Foo said he also believed that the government's decision on the matter was likely to be in MyEG's favour.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)