MyEG and Scicom stocks plunge

This article first appeared in The Edge Financial Daily, on December 13, 2018.
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KUALA LUMPUR: Shares of e-government service providers tumbled further yesterday as Putrajaya’s scrapping of the RM3.5 billion national immigration control system (SKIN) project on Monday continued to rattle investors, prompting a stampede for the exit ahead of any possible axing or non-renewal of other such projects amid drastic cost cuts by the administration and its new-found inclination to handle projects in-house.

Already only worth about a third of its value after Pakatan Harapan’s shocking win in the May general election, MyEG Services Bhd came under renewed pressure yesterday, crumbling 17% to 84 sen.

An e-government service provider involved in the renewal of foreign worker permits, MyEG is one of the patch-on systems reportedly put under review by the home affairs ministry, the immigration department and the Malaysian Administrative Modernisation and Management Planning Unit (Mampu), Deputy Home Affairs Minister Datuk Mohd Azis Jamman indicated in Parliament last week.

MyEG’s fifth consecutive losing session yesterday marked its biggest one-day drop since Oct 19.

Currently valued at just under RM3 billion, MyEG was one of the 10 worst performers on Bursa Malaysia yesterday and the most actively traded stock. A total of 231.86 million shares changed hands, approximately four times more than its 200-day average trading volume of 55.34 million shares.

Also on the receiving end was Scicom (MSC) Bhd, which offers digital government services and solutions for federal, local and state government agencies.

The stock, which hit limit down after its last done price dropped by 15 sen on Tuesday, sank another 15 sen yesterday to finish at RM1, its lowest since September 2014.

However, the benchmark index closed in positive territory, up 0.64%.

On Monday, Putrajaya’s termination of SKIN, for which the previous Barisan Nasional government had awarded Prestariang Bhd a 15-year concession, had sent the stock to new multi-year lows.

Prestariang has said it will be compensated for the concession termination although the quantum is not known. The counter finished unchanged yesterday at 29 sen.

In view of the sharp drop and heavy trading, MyEG said it queried its board of directors and major shareholders but said they were unaware of what may have caused the unusual market activity at the counter.

“The company wishes to inform that to the best of its knowledge after making due enquiry with the board of directors and major shareholders of the company seeking the cause of the unusual market activity in the company’s securities, the company is not aware of any factor which may have contributed to the unusual market activity, which led to the sharp fall in share price and increase in volume recently,” MyEG said in a filing with Bursa Malaysia.

These queries include any unannounced corporate developments, including those in negotiation or discussion stages, and any rumour concerning the group’s business and affairs.

In response to complaints that it had been slow to deal with issues including lost permits, MyEG had previously stressed that it does not have the authority to approve the printing of any permit under the temporary foreign worker, or PLKS, permit.

It pointed out that a real-time status-checking facility is available on the MyEG portal to allow users to check the status of their application, and approval is needed from the immigration department prior to the printing and delivery of the PLKS permits.

“The company will make the necessary announcement to Bursa Securities of any material information in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Bhd, in particular, paragraph 9.03 of the Main LR on immediate disclosure obligations,” read the filing, which was released on to the stock exchange after market close.