KUALA LUMPUR: MyEG Services Bhd was Bursa Malaysia’s most active stock and among top losers today after the government decided not to extend a 2015 contract to legalise foreign workers awarded to it beyond June 30 this year.
The stock plunged to an intraday low of 65.5 sen, after a news portal quoting Home Minister Tan Sri Muhyiddin Yassin as saying the re-hiring exercise of undocumented foreign workers would be terminated by end-June.
Muhyiddin added that all dealings with vendors appointed earlier would be terminated without any extension.
The program was introduced in 2015 by the previous government to legalise some 1.5 million to two million foreign workers.
MyEG was one of the three vendors appointed to undertake the program. The contracts had been renewed several times.
On Monday, MyEG lost nearly 25 per cent before recovering slightly after the company issued a clarification in regards to the termination.
The stock closed 20.35 per cent or 17.5 sen lower at 68.5 sen with 206.6 million shares traded.
In a filing to Bursa Malaysia, MyEG described the news articles which appeared to insinuate that the management of illegal foreign workers’ re-hiring programme was terminated on an adhoc basis as “inaccurate and misleading”.
MyEG said it had received a notification letter from the Home Ministry in relation to the extension of the project until December 31, 2017 instead of August 15, 2016.
Further, it said the June 30, 2018 closing date as stated in the news articles was the grace period to allow all remaining registrants to complete all pending procedures under the project.
“Therefore, the issue of any adhoc termination of the project, as alluded to in the news articles, does not arise as the project, which is intended to run for a fixed duration, is adhering to its existing prescribed deadlines.
“The board would like to assure all parties that there are no changes to its business activities and all concession and commercial services are operating as usual,” it said.
Prior to today, MyEG’s share prices had plunged as much as 71.3 per cent since Pakatan Harapan's stunning victory in the 14th General Election (GE14) on May 9.
Analysts said MyEG was staring at difficult days ahead with uncertainty hanging over its concession business, especially immigration-related contracts.
Nevetheless, Macquarie Equities Research said the contract termination would not impact MyEG’s earnings for financial year 2019.
Hence, the firm kept its target price of RM1 and believed MyEG would continue to deliver quality earnings as evidenced by its commendable 20 per cent growth year-on-year in the nine-month results released last week.
MyEG provides e-government services, including the issuance and renewal of driver's licences, renewal of vehicle road tax, renewal of foreign workers permits and traffic offence summons payments, to several government departments.