KUALA LUMPUR (July 3): Investors chased after Puncak Niaga Holdings Bhd’s shares and catapulted the counter to the biggest gainer spot, sending its share price to a high in more than two years.
This sudden interest in Puncak Niaga came following news that Prime Minister Datuk Seri Najib Razak has agreed to Selangor government’s move to acquire of all four water concessionaires in the state.
At noon break, Puncak Niaga shares jumped by 38 sen or 19.9% to RM2.29 – a level the stock has not seen since April 2011. A total of 25.42 million shares changed hands.
A daily, quoting Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim, reported today that Khalid had received a letter from Najib agreeing to the state government acquiring all four water concessionaires in Selangor.
Should this come to fruition, it will put an end to an exhaustive battle that has been brewing for years between the Selangor state government and the water concessionaires for control of the state’s water assets.
The Selangor government has cited incompetence on the part of the concessionaires as one of the reasons for acquiring the companies.
Khalid was quoted by the daily as saying Selangor is ready to bring the supply of water under its control before the end of this year.
While the news should bode well for Puncak Niaga, which has an equity stake in the state’s water operations, RHB Research’s analyst Kong Heng Siong is still giving the company a “hold” rating.
The research house has also retained its fair value on Puncak Niaga at RM2.
“The news article did not contain any ballpark figures or details on the terms of the agreement. In its last proposal, the Selangor state government had offered Puncak an equity value of RM1.1 billion for its water operations while valuing Syabas’s equity portion at RM438 million.
“These (monies) are to be forked out by the Selangor state government. Separately, the plan also proposed that the Federal Government pay RM1.4 billion and RM2.7 billion respectively via Pengurusan Aset Air Bhd to Puncak and Syabas to take over their existing water assets,” said RHB’s Kong in a note today. – theedgemalaysia.com