A 25-month extension on concession pushes Pharmaniaga up by 9.7%

KUALA LUMPUR (Nov 11): Pharmaniaga Bhd is hogging the limelight today. The stock opened at RM2.62 this morning, a big gap from last Friday’s closing of RM2.26, on the news that the government has agreed to provide a 25-month interim period for procurement of drugs to Pharmaniaga after its concession ends on Nov 30.

The stock is trading at RM2.48, soared 22 sen, or 9.7% as at 9.40am. However, trading volume is not that large at 864,500 shares traded.

Health Minister Datuk Seri Dr Dzulkefly Ahmad last Friday said the interim period from Dec 1, 2019 to Dec 31, 2021 was to ensure that there was no supply chain disruption in the supply and distribution of medicines to the public healthcare facilities nationwide.

“If the Ministry of Health is able to take over the role of Pharmaniaga in less than 25 months, then an open tender for procurement of medicines will be initiated early,” Dr Dzulkefly told the media after his ministry’s post-Cabinet meeting last Friday.

Pharmaniaga’s share price plunged two weeks ago on concerns that the company will lose its medical supplies concession after Dr Dzulkefly announced that there would be no more concessionaires for logistics and distribution services for medical supplies, and an open tender system would be introduced instead.

Source: TheEdgeMarkets