IJM Corporation Berhad (3336:KL) says its RM1.12bil LRT 3 underground contract terminated

IJM Corporation Berhad (3336:KL) says its RM1.12bil LRT 3 underground contract terminated

IJM Corporation Berhad (3336:KL) says its RM1.12bil LRT 3 underground contract terminated.

The company, in a filing with Bursa Malaysia today, said its wholly owned subsidiary, IJM Construction Sdn Bhd (IJMC), had received the notice of termination from MRCB George Kent Sdn Bhd on July 8.

IJMC had been awarded the contract on March 13, 2018. Preliminary work had commenced before the project was suspended in June 2018.

“IJMC is currently consulting its advisers and will seek appropriate legal redress under the contract,” it said.

Apart from the potential earnings from the project, IJM said the termination of the project would not have any significant effect on the financial position of the group.

In the filing, IJM said it had lost the contract because the LRT 3 project was remodeled from a project delivery partnership model to a fixed price model.

In July last year, the Finance Ministry in a statement had said that the LRT 3 project would resume at a total cost of RM16.63bil, compared with its original price tag of RM31.65bil.

Part of the reduction was contributed by the cancellation of a two-km tunnel and an underground station. The 37-km LRT 3 line connects Bandar Utama in Petaling Jaya to Johan Setia in Klang.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 2.23.

The projected upper bound is: 2.59.

The projected lower bound is: 2.27.

The projected closing price is: 2.43.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 2 black candles for a net of 5 white candles. During the past 50 bars, there have been 27 white candles and 19 black candles for a net of 8 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 40.5405. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.55. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 58 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -7. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

Rex Takasugi – TD Profile

IJM CORP BERHAD closed up 0.030 at 2.430. Volume was 49% below average (neutral) and Bollinger Bands were 29% narrower than normal.

Open High Low Close Volume___
2.390 2.440 2.380 2.430 2,524,500

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 2.44 2.23 1.92
Volatility: 31 47 53
Volume: 3,735,400 5,592,864 4,270,645

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

IJM CORP BERHAD is currently 26.3% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into IJMS.KL (mildly bullish). Our trend forecasting oscillators are currently bullish on IJMS.KL and have had this outlook for the last 21 periods.

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