Tenaga jumps most since 2008

Publish date: Tue, 03 Dec 2013, 11:55 AM
Tenaga Nasional Bhd, Malaysia's national power distributor, surged the most in five years and led the country's benchmark equity index to an all-time high after the government allowed the company to raise power prices.

The shares jumped 13 per cent to RM11.14 as of 10.47am in Kuala Lumpur, heading for the biggest gain since June 2008 and the highest closing level since February 1994. The FTSE Bursa Malaysia KLCI Index rose 0.4 per cent to 1,825.46.

Malaysia said yesterday it will let Tenaga raise tariffs by an average of around 15 per cent in Peninsular Malaysia and by 16.9 per cent in the country's eastern state of Sabah from January 1, the first increase since June 2011. Higher prices will help cover Tenaga's fuel costs and make it less dependent on state subsidies.

"The tariff hike is the main catalyst that would propel the share price higher," Faisal Syed Ahmad, an analyst at CIMB Group Holdings Bhd, said in a report today. It "addresses Tenaga's liquefied natural gas costs, providing stability to its expenditure moving forward."

Tenaga is CIMB's top pick in Malaysia's power industry. The analyst has an outperform rating on the stock and a price target of RM12.29, or 10 per cent above its current level.

Hong Leong Investment Bank Bhd raised its price target for Tenaga to RM11.90 from RM10.35 and maintained a buy rating, saying it was "positively surprised" by the tariff increase in a report today.-- Bloomberg

Labels: TENAGA

Discussions
Be the first to like this. Showing 6 of 6 comments

hw0706

all the manufacturing sector will be affected and cost will go up again.

2013-12-03 14:46

iafx

indeed

2013-12-03 14:50

nightshade

building materials....after this, property price going up again.....

GST kick in, another round....

2013-12-03 14:51

iafx

only property in prime area have some buffer to go, other likely to stay put depends on the supply & economy condition. if developer reduce # of new project than the price will see stable.

2013-12-03 14:58

Fortunebull

Look for those power counters! YtlPower etc!

2013-12-03 15:04

Steven Lee

Ppl suffer, share holder happy...

2013-12-03 15:46

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