Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
Research House: OSK
Company Name: TENAGA NASIONAL BHD
Research House: OSK
Tenaga Nasional Bhd surged the most in 32 months in Kuala Lumpur trading after the national power distributor won Malaysian government approval to raise electricity prices for the first time in almost three years.
The stock jumped 8.9 per cent to RM7.10 at 9:51 a.m. local time, set for its steepest increase since September 19, 2008, outpacing the FTSE Bursa Malaysia KLCI Index’s 0.5 per cent gain. Tenaga has rallied 18 per cent this month, poised to be the best performer on the benchmark gauge in May.
“It’s good news for Tenaga,” Chris Eng, an analyst at OSK Research Sdn Bhd, wrote in a report today. “The government is finally taking the right steps towards making Tenaga a viable business concern going forward,” said Eng, who upgraded the stock to “buy” from “neutral” and increased its fair value to RM8.66 from RM7.03.
State-controlled Tenaga yesterday said it will raise prices by an average 7.1 per cent from tomorrow when the government cuts its gas subsidy to power producers. The Southeast Asian nation has been gradually reducing state assistance for essential goods like flour and fuel in a bid to rein in its budget deficit. It typically spends about RM73 billion (US$24 billion) a year on subsidies, Prime Minister Najib Razak said last April, calling this “not sustainable.”
The move prompted a wave of rating upgrades for the utility by brokerages including Citigroup Inc, Deutsche Bank AG and Nomura Holdings Inc.
Its stock rating was raised to “buy” from “sell” at Citi and its share price estimate increased to RM7.90 from RM6.10, Kuala Lumpur-based analyst Ng Yong Yin wrote in a report dated May 30. He raised his profit forecast for fiscal 2012 by 19 per cent and by 22 per cent for 2013.
The Losers
Some steelmakers and cement stocks fell on concern higher energy costs will crimp earnings. Lafarge Malayan Cement Bhd, Malaysia’s biggest cement maker, slid 1.2 per cent to RM7.40 ringgit and YTL Cement Bhd dropped 1.1 per cent to RM5.40. Ann Joo Resources Bhd, a steel-maker, lost 1.1 per cent to RM2.79, headed for the lowest close since March 8.
Other heavy electricity users include Southern Steel Bhd, Kinsteel Bhd, MMC Corp and rubber glove manufacturers Top Glove Corp and Kossan Rubber Industries Bhd, HwangDBS Vickers Research Sdn Bhd analyst Goh Yin Foo wrote in a report today.
“Apart from the direct impact on earnings, the electricity and gas tariff decision may also translate into higher inflationary pressures as the multiplier effects works its way through the economic chain, and a reassessment of the expected timing for a possible snap general election since it could take a while for the public to adjust to higher living expenses,” Goh said. -- Bloomberg
The stock jumped 8.9 per cent to RM7.10 at 9:51 a.m. local time, set for its steepest increase since September 19, 2008, outpacing the FTSE Bursa Malaysia KLCI Index’s 0.5 per cent gain. Tenaga has rallied 18 per cent this month, poised to be the best performer on the benchmark gauge in May.
“It’s good news for Tenaga,” Chris Eng, an analyst at OSK Research Sdn Bhd, wrote in a report today. “The government is finally taking the right steps towards making Tenaga a viable business concern going forward,” said Eng, who upgraded the stock to “buy” from “neutral” and increased its fair value to RM8.66 from RM7.03.
State-controlled Tenaga yesterday said it will raise prices by an average 7.1 per cent from tomorrow when the government cuts its gas subsidy to power producers. The Southeast Asian nation has been gradually reducing state assistance for essential goods like flour and fuel in a bid to rein in its budget deficit. It typically spends about RM73 billion (US$24 billion) a year on subsidies, Prime Minister Najib Razak said last April, calling this “not sustainable.”
The move prompted a wave of rating upgrades for the utility by brokerages including Citigroup Inc, Deutsche Bank AG and Nomura Holdings Inc.
Its stock rating was raised to “buy” from “sell” at Citi and its share price estimate increased to RM7.90 from RM6.10, Kuala Lumpur-based analyst Ng Yong Yin wrote in a report dated May 30. He raised his profit forecast for fiscal 2012 by 19 per cent and by 22 per cent for 2013.
The Losers
Some steelmakers and cement stocks fell on concern higher energy costs will crimp earnings. Lafarge Malayan Cement Bhd, Malaysia’s biggest cement maker, slid 1.2 per cent to RM7.40 ringgit and YTL Cement Bhd dropped 1.1 per cent to RM5.40. Ann Joo Resources Bhd, a steel-maker, lost 1.1 per cent to RM2.79, headed for the lowest close since March 8.
Other heavy electricity users include Southern Steel Bhd, Kinsteel Bhd, MMC Corp and rubber glove manufacturers Top Glove Corp and Kossan Rubber Industries Bhd, HwangDBS Vickers Research Sdn Bhd analyst Goh Yin Foo wrote in a report today.
“Apart from the direct impact on earnings, the electricity and gas tariff decision may also translate into higher inflationary pressures as the multiplier effects works its way through the economic chain, and a reassessment of the expected timing for a possible snap general election since it could take a while for the public to adjust to higher living expenses,” Goh said. -- Bloomberg
No comments:
Post a Comment