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Singapore Investment


Politically-linked stocks pique interest after dissolution of Parliament

KUALA LUMPUR (Oct 11): Malaysian politically-affiliated stocks seem to have piqued the interest of investors on Tuesday (Oct 11), following the dissolution of Parliament on Monday (Oct 10), with some of them bucking the overall market bearish sentiment to close slightly higher.

A majority of Bursa Malaysia stocks fell on Tuesday, with 786 losers, versus 197 gainers, while 303 remained unchanged. The KLCI dropped 1.36% or 19.18 points at 1,386.82 points, bringing the year-to-date decline to 11.53%.

Nonetheless, some perceived politically-linked stocks saw a spike in trading volume on Tuesday, including MY EG Services Bhd (MYEG), Advance Synergy Bhd, Malaysian Resources Corp Bhd (MRCB), Datasonic Group Bhd, Destini Bhd, KUB Malaysia Bhd, Media Prima Bhd and Star Media Group Bhd.

The trading volume of these stocks surpassed their respective 90-day volume moving average (MA). (See Table)

MYEG’s trading volume was the largest on Tuesday at 68.32 million shares — the highest since Sept 6 — although its share price closed 2.5 sen lower at 88.5 sen. The e-government solution provider was the most actively traded stock of the day.

Meanwhile, Advance Synergy recorded 57.54 million shares exchanging hands — the highest level since August last year. The fourth most actively traded stock was up one sen to seven sen.

PKR president Datuk Seri Anwar Ibrahim had denied having any interest in Advance Synergy. Nonetheless, the stock will tend to draw trading interest whenever there are any changes on the domestic political landscape.

MYEG and Datasonic, both of which are the main providers of e-government solutions in the country, are often linked to Umno, although the political party is not on the substantial shareholder list.

Datasonic’s share price closed unchanged on Tuesday. The counter saw 9.7 million shares exchanging hands, surpassing its five-day volume MA of 4.6 million shares, 20-day volume MA of 4.4 million shares, and 90-day volume MA of 6.3 million shares.

It is worth noting that little-traded KUB Malaysia, which is related to Umno Federal Territory liaison chairman and Umno Supreme Council member Datuk Seri Johari Abdul Ghani, also saw an increase in trading. Its trading volume climbed to 1.84 million shares, versus its circa 120,000-150,000 shares for five-day, 20-day and 90-day volume MA.

KUB, which is involved in trading of liquefied petroleum gas, closed two sen higher at 57 sen, giving it a market capitalisation of RM317.2 million.

Johari is chairman and the single-largest shareholder, with 33% stake in KUB and edible oils packaging firm CI Holdings Bhd.

However, trading of CI Holdings’ shares remained subdued, with just 21,200 shares transacted on Tuesday. The stock closed four sen or 1.5% higher at RM2.74 sen, giving it a market capitalisation of RM443.9 million.

Johari is also the second largest shareholder in Media Prima, the country’s largest media conglomerate, with a 20% stake; after the 31.9% shareholdings owned by Tan Sri Syed Mokhtar Al-Bukhary (via Aurora Mulia Sdn Bhd), widely known to be a close affiliate to two-times former prime minister Tun Dr Mahathir Mohamad.

Media Prima’s trading volume was 1.42 million shares, as compared to five-day volume MA of just 159,700 shares, 20-day volume MA of 199,195 shares, and 90-day volume MA of 925,490 shares.

The media group’s share price gained two sen at 45 sen per share, valuing it at RM499.1 million.

As Malaysia is running up to its 15th General Election (GE15) within 60 days from Monday, it will be interesting to see how investors are going to strategise their investments in Bursa Malaysia, ahead of this upcoming national poll.


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