KUALA LUMPUR: Bursa Malaysia Securites suspended the short-selling of MMC Corporation at midday on Monday after the share price fell more than the 15% or 15 sen limit.
According to the Bursa Securites statement issued at 11.58am, the proprietary day trading (PDT) and intraday short selling (IDSS) activities will be suspended for the rest of the day. They will resume at 8.30am on Tuesday.
At 12.30pm, MMC Corp was down 23 sen to RM1.12. It fell to an intra-day low of RM1.12.
The FBM KLCI was down 0.08 point to 1,777.07. Turnover was 1.32 billion shares valued at RM809.05mil. Decliners beat advancers 658 to 154 and 296 counters were unchanged.
Kenanga Investment Research said that in a surprise move, the Ministry of Finance announced the termination of Gamuda-MMC Corp JV as the main contractor for the tunneling works for MRT2 which was valued at RM16.7b that was awarded back in 2016.
News reports said the unfinished underground work would be re-tendered out through an international open tender process.
“This is a negative shock to us as we never expected the government to terminate the contract as the project is on-going and the termination might result in a hefty compensation to the contractors.
“With this news, we cut both Gamuda (TP: RM3.25) and MMC Corp (TP: RM1.45) to market perform from outperform with lower target prices of RM3.25 and RM1.45 from RM4.30 and RM1.95 previously.
“We downgraded Gamuda’s FY19/FY20E by 33%/32% while MMC Corp’s FY18/FY19E are reduced by 43%/63% after factoring the loss of this tunnelling works,” said Kenanga Research.
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