Election-thematic counters in limelight

Stocks linked to Muhyiddin have soared on the news of his appointment as the 8th PM, after having fallen to their lows post-GE14


THE talk of fresh general election (GE) tends to attract investor interest in politically-linked counters. When Malaysians voted for a change of government in May 2018, ending Barisan Nasional’s rule after over six decades, investors dumped stocks perceived to be linked to the former ruling coalition.

After two years, the new Perikatan Nasional (PN) coalition-led government has brought many of these stocks back to the limelight.

The Malaysian Reserve looks into all PN-related counters: Stocks linked to Prime Minister (PM) Tan Sri Muhyiddin Yassin — Eden Inc Bhd and Thriven Global Bhd — have soared on the news of his appointment as the eighth PM, after having fallen to their lows post-14th GE (GE14).

Both Eden and Thriven Global are linked to Muhyiddin’s son, Datuk Fakhri Yassin Mahiaddin. Thriven is a property developer, while Eden is engaged in food and beverage, and tourism operations.

Eden is trading at a price of 17.5 sen, giving the company a market capitalisation of RM70.59 million. The stock advanced 35% in the past year. Thriven is currently priced at 20 sen per share, giving it a market capitalisation of RM109.39 million.

The stock declined 13% in the past 52 weeks. MyEG Services Bhd, a company whose income is derived mainly from government contracts, is currently trading at RM1.24 with a market capitalisation of RM4.26 billion.

After GE14, the stock, which was trading close to RM3, plunged to a low of 68 sen.

However, investors have bought back into MyEG, driven by continued acknowledgement of the company’s successful expansion in Indonesia and its bright prospects for two government contracts at home, thanks to the firm’s proven track record.

MyEG currently trades at 17 times its estimated earnings per share for the coming year. The company’s dividend yield is 1.5% on a trailing 12-month basis and 1.5% based on Bloomberg dividend forecasts for the next 12 months.

Over the last year, its stock declined 6.5%.

Most recently, MyEG announced it has been told by the government to continue to provide e-government services pertaining to vehicle registration, licensing and summons payment for another month until June 30.

The company also received notification to continue, until further notice, the provision of online renewal of temporary employment passes for foreign workers (PLKS) for the Immigration Department.

The  concession agreement for the e-government services — which it first secured in 2000 for a period of 15 years — was extended in 2014 for six years. As for the online renewal of PLKS, the group secured the contract for the job in January 2017.

KUB Malaysia Bhd, which is another politically-linked counter, is now 32.96%-owned by JAG Capital Holdings Sdn Bhd, an investment holding company linked to former Second Finance Minister Datuk Seri Johari Abdul Ghani.

Shortly after PN took over, KUB plunged to its five-year low of 16 sen before gradually racing to a peak of 46 sen on May 21, 2020, when the company returned to black in its first quarter ended March 31, 2020.