Political play evident as market reopens

PETALING JAYA: Stocks that are linked to Barisan Nasional fell under heavy selling pressure amid volatile trading on Bursa Malaysia yesterday.

The selldown came as no big surprise as analysts predicted that counters that are aligned with Barisan would be the first to feel the brunt from the selling pressure after the shock victory by Pakatan Harapan in the general election.

Government services provider MyEG Services Bhd and construction group George Kent Bhd were among the politically-linked stocks that saw their prices hit limit-down since early trading yesterday.

At the close, MyEG share price dropped 77 sen or 29.84% to RM1.81 while George Kent tumbled RM1.18 or 29.95% at RM2.76 respectively.

Engineering specialist for aviation, marine and oil and gas compa- ny Destini Bhd also succumbed to heavy selling to close at 26 sen, down 18 sen or 40.7%.

Destini is controlled by Datuk Rozabil Abdul Rahman who is an active member in the Umno Youth movement. Destini is also 17.3%owned by the Finance Ministry via its wholly owned subsidiary Aroma Teraju.

KUB Malaysia Bhd, a diversified government-linked company linked to Umno, dropped 8 sen or 20.25% to close at 32 sen while DRB-Hicom Bhd fell 15 sen or 6.98% to RM2.00 respectively.

Surprisingly, Felda Global Ventures Holdings Bhd – the world’s largest crude palm oil producer and a vital cog in Malaysian politics – gained 19 sen or 11.8% to settle at RM1.80.

Meanwhile, Umno media stocks namely Utusan Melayu (M) Bhd and Media Prima Bhd slid yesterday.

Utusan plunged to a five-year low in early trade to close 5.5 sen or 17.7% lower at 26 sen while Media Prima saw its shares fell 2.5 sen or 7.94% to 29 sen. Star Media Group dropped 4 sen or 3.74% to RM1.03 respectively while Media Chinese International Bhd closed 0.005 sen higher at 31 sen.

According to UOB Kay Hian, MyEG Services, George Kent and Destini were considered as potentially vulnerable stocks.

“Bottom-fishing may be too premature at this juncture for some of these fundamental stocks but we prefer to stay on the sidelines until the dust settles,” it said in its latest report.

However, UOB Kay Hian believed that post-GE market jitters should create good buying opportunities for many apolitical stocks.

“Further, we reckon the selldown may not be too deep should the new government quickly assert business-friendly policies. “Nevertheless, 2018’s outlook remains challenging amid expectations of a global liquidity contraction,” added the research outfit.