January 8, 2010

TNB closes at 3-month low on tariff concerns

KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] (TNB) closed at RM8.20 yesterday, their lowest since October last year as investors were concerned that it would not be able to get its proposed tariff hike approved by the government. It fell 15 sen to RM8.20 in active trade, with 17.1 million shares done. It fell to a low of RM8.08 in intra-day trade.

Bloomberg reported Energy, Green TECHNOLOGY [] and Water Minister Datuk Peter Chin as saying today the government had not decided whether to raise electricity tariffs.

In December, he said the government would next review electricity tariffs in January, but whether the tariffs might be increased or lowered would hinge on fuel costs such as coal and gas.

OSK Investment Research said today it was maintaining a buy on TNB. It said the selling on TNB shares was due to the spike in oil and coal prices. Crude oil was trading at US$82.62 (RM278.42) at 7.50pm.

"We are still hopeful of a tariff hike but have not built it into our forecasts. Our fair value is RM9.38, which does not impute any effect from a tariff hike," said its associate director Chris Eng.

HwangDBS Vickers Research had in a recent report said it liked TNB as a beneficiary of the economic recovery. It said the earnings were sensitive to demand growth. Every 1% improvement in electricity demand would raise earnings by 9%, it added

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Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;

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