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Hot Stocks – E-Govt players fall like dominoes

Trading room – Thu 13 Dec 2018

The shares of some e-govt players have been falling like dominoes after the cancellation of a contract to Prestariang Berhad and fears that there are future cancellations as well to other players such as My Eg Berhad.

Shares in Prestariang Bhd had slided in the wake of the cancellation of itsRM3.5bil national immigration control system (SKIN) concession. The shares recently plunged 15 sen to 30.5 sen, its lowest level in nearly seven years as panic selling ensued after news broke on the project cancellation.

According to media reports, the Home Ministry confirmed the Immigration Department’sRM3.5bil national immigration control system (SKIN) concession has been canceled.

A research house has on Prestariang outlook “cut FY18-20F earnings by up to 88% to reflect the loss of SKIN’s profit, lower its target price to 26 sen and downgrade the stock from Add to Reduce”.

However, PrestariangBhd said it is entitled to compensation following the government’s decision to terminate its RM3.5bil project with the Immigration Department.

Prestariang has a 70% stake in the project.

Meawhile, My EGBerhad fell 17 sen to 84 sen yesterday with 231.85 million shares done, in the absence of any negative news.

MyEG Services Bhd said today it is unaware off actors which may have contributed to some unusual market activity (UMA), which led to the sharp fall in its share price and an increase in volume recently.

However, fears of review of its contracts with the government may have contributed to sellings on the stock.

Other e-government contract players have also fallen in renewed selling over the last few days.

Those who track the stocks under the mPower Algorithm knows that these stocks have been a sell since some time back. In fact, previous trade calls on MyEg and Prestariangwere exited at RM1.36 (currently RM0.84) and RM0.85 (currently RM0.30)respectively, netting gains of 17.2% and 54.5% then.

However with their steep falls, are there opportunities to re-enter trades on these stocks for another round?

Given their volatilities, trades should be entered on intra-day at cycle lows only and the breaking of intra-day key critical levels.

Watch carefully the key price levels and the trading setups as highlighted in the mPower Algorithm and MPower Trading reports today for thee-government players.

Note: Certain info presented in the tables above has been redacted to comply with the agreement with elite members of the mPower Algorithm program and mPower Trading program and certain institutional clients. The above analysis reflects our personal view only and is subject to terms of use. Please refer to the full report inside for the complete info.