Tuesday, January 22, 2019

MSNIAGA: Fakers and Fake News

Today MSNIAGA share price rose 34 sen to RM1.50 (or, what's commonly known in the market as a price limit-up). The reason was the company securing a contract worth RM1.9 billion for the Enhanced Malaysia International Internet Gateway ("EM-IIG") High-Speed Broadband project, developed by Xiddig Cellular Communications Sdn Bhd.

The acronym EM-IIG used to refer to East Malaysia International Internet Gateway, which was intended to reduce the digital gap between the rural and urban population via the provision of high speed broadband Internet. The earlier version was announced by then DPM Zahid Hamadi in July 2016 (here).

The current version of EM-IIG is supposed to be part of the 5G platform for Southeast Asia, and was supposedly announced by current DPM Wan Azizah on January 18, 2019. Unfortunately, she was not present at the ceremony and her speech was apparently read by the former Chief Minister of Penang, Rashid Hasnon. Now, DPM Wan Azizah claimed that she did not approve the project (here), and Rashid has just come forward and claimed that he was asked to deliver DPM Wan Azizah's speech at the ceremony as the last minute replacement for DPM Wan Azizah (here). What can I say; stranger things had happened before in Boleh-land!

As for MSNIAGA, it is now a forgone conclusion that the RM1.9 billion contract was not worth the paper it was printed on. We can expect the share price to make a quick retreat tomorrow.

Chart 1: MSNIAGA's monthly chart as at Jan 22, 2019 (Source: Malaysiastock.biz)

After the selldown, investors will still be pondering the big question: Why wasn't MSNIAGA suspended on January 18 when the project was supposedly announced by DPM Wan Azizah? Surely it would have known that it has secured a lucrative project. The trading of the share on January 18 seems to suggest that no one was aware of the project. The announcement was made only after the market closed (here). There are 2 possible explanation for this: (1) MSNIAGA was very effective in containing price-sensitive information or (2) none of the insiders was convinced that the project was real.

Chart 2: MSNIAGA's 15-min intra-day chart as at Jan 22, 2019 (Source: Malaysiastock.biz)

This episode will leave many questions looking for answers. One of them would certainly be this; why would anyone dare to pull a stunt like this over DPM Wan Azizah?

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