MyEG, George Kent still in the red


Bursa Malaysia Securities Bhd’s move to set a lower price limit on MyEG Services Bhd and George Kent (M) Bhd made little difference as fresh investors selling saw the stocks traded to fresh lows yesterday.

Share prices of the politically-linked counters continued to flirt with price limits yesterday as nervous investors such as the Employees Provident Fund sold down the counters.

MyEg fell 36.5 sen, or 28.7%, to 90.5 sen as it become the most actively traded counter on the exchange with 481.5 million shares traded, while George Kent fell 43 sen, or 22%, to RM1.51 with 100.1 million shares traded — the fourth most active counter of the day.

Both the stocks have been under heavy selling pressure since market reopened on Monday after Pakatan Harapan’s victory in the 14th General Election.

A heavyweight contender for government contracts, MyEG has lost almost 66% of its share value this week and is currently trading as a penny stock.

It has lost RM4.73 billion in market value as its share price more than halved from RM2.58 on May 8.

Its share trading volume was 43.7 times the 20-day average.

Credit Suisse Securities (M) Sdn Bhd analyst Danny Chan downgraded his recommendation on MyEG to ‘Underperform’ and assigned a target price of 90 sen. The analyst consensus rating is equivalent to ‘Sell’.

MyEG now trades at 14.6 times, trailing 12-month earnings per share and 13 times its estimates for the coming year.

It has returned a negative 59% so far this year and a loss of 60% in the past 52 weeks.

The stock, which was recently downgraded by CIMB Investment Bank Bhd to ‘Reduce’, is at risk of losing future earnings from its Goods and Services Tax (GST) monitoring project, as the tax is expected to be scrapped by the newly-formed government by June 1.

To support its share price, MyEG did share buyback of 20 million shares yesterday in a price range of RM1.27 to 89.5 sen, its filing noted. The company also bought 10 million of its shares on Wednesday at an average piece of RM1.27 a share.

George Kent, the only fully integrated rail systems player in Malaysia, has since May 8, seen RM1.2 billion wiped from its market capitalisation.

In an exchange filing yesterday, the company noted it intends to get shareholders approval in an EGM next month to undertake a share buyback as well.

The company’s share took a hit for its close links with the previous Barisan Nasional-led government.

On Tuesday, Bursa Malaysia froze the lower limit price for MyEG and George Kent, and had set the lower limit at RM1.27 and RM1.94 respectively.

In addition, Bursa Malaysia had also, on Monday, suspended the short selling activities for MyEG, George Kent, Gabungan AQRS Bhd and Excel Force MSC Bhd, as their last done price dropped more than 15% from their reference price.