PETALING JAYA: Shares in Tenaga Nasional Bhd (TNB) led gainers on Bursa Malaysia yesterday after trading resumed following a one-day halt for an announcement by the national utility. This was following the Government approval on Wednesday for an increase in electricity tariff a second time in two years.
“The tariff hike had come a year earlier than we had expected. The 25% average tariff hike was substantial,'' CIMB Research said in an update yesterday.
TNB shot up RM1.70, or 23%, to a three-month high of RM9 on heavy volume of 65.8 million shares. The price jump added RM7.36bil to its market value, bringing it to RM39.2bil. That makes TNB the fourth most valuable stock on Bursa, ahead of Malayan Banking Bhd and after Public Bank Bhd.
The KL Composite Index (KLCI) rose 25.01 points, or 2%, to 1,248.57 points yesterday.
The benchmark's advance was also due to a rebound in plantation stocks which were sold down on Wednesday on news the Government will replace the existing cess system with a windfall tax levy.
Shares in Sime Darby Bhd, the biggest company on the stock exchange and the largest listed palm oil planter in the world, gained 20 sen to RM9.05, while close rival IOI Corp Bhd rose 10 sen to RM7.20.
Crude palm oil futures on Bursa Derivatives, the global benchmark, gained yesterday with the futures contract for August delivery rising RM72 to RM3,600 a tonne.
The focus yesterday was on the rise in TNB's share price, which helped buffer the KLCI's four-day slide. Moody's Investors Service yesterday reaffirmed its Baa1 senior unsecured rating on the utility firm after the tariff review was announced.
The stock was also upgraded from a “hold” to a “buy” by Deutsche Bank AG, which cited a 28% boost to profit in 2010 following the rate increase.
AmResearch, however, maintained its “hold” call on the stock, as it expects the rate increase to address only part of TNB's rising fuel costs.
“Assuming (there are) no material changes in the generation mix, the higher gas price could result in up to RM5bil in additional generation costs to the group, leaving very little to address the rising coal costs,” it said.
In the meantime, the research house said TNB would continue to push for a coal pass-through formula to be adopted next year when the three-year tariff review interval from 2006 is supposedly due.
“However, given the latest aggressive move, we are unsure if the review is still in the cards,'' it added.
TNB chief executive officer Datuk Seri Che Khalib Mohamad Noh said on Thursday that fuel accounted for 30% to 40% of TNB's overall costs, with gas taking up 68% and coal, 26%.
The record high price of coal, which has risen 170% since 2007, means TNB would not be able to fully cover its coal cost despite the latest rate hike.
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