TNB down, but construction up on budget relief

PETALING JAYA: Shares in Tenaga Nasional Bhd (TNB) came off near a record high after the Government postponed a scheduled tariff hike this year to shore up the fledgling economic growth following a review on public spending.

TNB shares fell 10 sen, or 0.7%, yesterday to close at RM14.40.

The Government yesterday revised its 2015 growth forecast to between 4.5% and 5.5%, while predicting a budget revenue shortfall of RM13.8bil due to the sharp decline in the price of crude oil.

The tariff freeze was among several measures announced by Prime Minister Datuk Seri Najib Tun Razak aimed at shoring up the economy.

Development expenditure of RM49bil for 2015 was kept intact.

“This news should remove the overhang on construction share prices, most of which have declined since late 2014 due to fears of a major cutback in infra spending,’’ CIMB Research said in a report.

Shares in top construction companies Gamuda Bhd and IJM Corp Bhd were up six sen to RM5.05 and one sen to RM6.61, respectively.

But the mood in the market continued to be cautious.

The FTSE Bursa Malaysia KL Composite Index skidded 3.20 points to 1,750.11 points yesterday, while the ringgit fell to a fresh six-year low at 3.6075 against the US dollar.

“The market appears to be sceptical towards the new fiscal deficit target at 3.2% of GDP (versus 3% previously) which is much better than earlier expected,’’ UOB Group global economics & markets research said in a note.

To keep to its revised fiscal target, the Government will reduce operating expenditure by RM5.5bil from Budget 2015 that was tabled in Parliament in October last year.

Among the cutbacks include the deferment of the National Service (NS) programme in 2015, which is expected to save the Government RM400mil.

This is a setback for Gunung Capital Bhd, the transport operator which last month said it was awarded a three-year contract worth RM165mil by the Defence Ministry to provide bus services for the NS programme.

The stock tumbled six sen, or 7%, to 78 sen yesterday.