MRCB, George Kent among most active counters on LRT3 news

Putrajaya has given the green-light for the LRT3 project. (Bernama pic)

KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) and George Kent (M) Bhd shares were among the most actively traded in the morning session today after the government gave the green-light for the Light Rail Transit Line 3 (LRT3) project.

At 11am, MRCB eased one sen to 78.5 sen with 50.97 million shares traded, while George Kent perked eight sen to RM1.22 with 21.74 million shares changing hands.

In a research note today, MIDF Amanah Investment Bank said the project would proceed at a cost of RM16.6 billion following the cost reduction exercise as instructed by the new federal administration.

“All things considered, we opine the continuation of LRT3 gave a positive tone to the MRCB-George Kent joint venture (JV) company’s prospects,” it said.

It said though the project’s costs were significantly reduced, the cost-saving approach by the new government did not result in a loss of earnings opportunity for the JV company.

“However, the cost structure has been materially altered. Taking this into consideration along with the new fixed price model, we estimate that net profit margin will be adjusted lower,” it said.