Hot Stock Tenaga climbs 2% ahead of Budget 2014

by **Cals** Thu 24 Oct 2013, 11:36

Hot Stock Tenaga climbs 2% ahead of Budget 2014

Business & Markets 2013

Written by Chong Jin Hun of theedgemalaysia.com

Thursday, 24 October 2013 10:43

KUALA LUMPUR (Oct 24): Tenaga Nasional Bhd rose as much as 2% among top gainers. Analysts said this is in anticipation that the state-controlled utility will benefit from Malaysia's 2014 Budget.
Today, Tenaga was traded at RM9.49 with some four million shares done at 10.38am. The sixth-largest gainer across the bourse had earlier risen as much as 17 sen to RM9.53.
Kenanga Investment Bank Bhd said buying momentum in Tenaga shares has been gaining pace over the past few days. This is because the market expects the firm to get approval to review its tariff rates by year-end.
In a note today, Kenanga said Tenaga shares are showing positive technical indicators.
"As a result, its share price rose 18.0 sen to close at RM9.36 after hitting a previous high @RM9.41 on intra-day trading yesterday.
"All in, we feel positive on Tenaga and believe the share price is raring for an upside breakout soon. We are calling a buy on Tenaga with short-to-medium term target price of RM10.38 (Fibonacci resistance). Meanwhile, the crucial underlying support is pegged at RM9.09," Kenanga said.
RHB Research Institute Sdn Bhd analyst Kong Heng Siong had recently said Tenaga is seen as a potential beneficiary of 2014 Budget which will be annouced tomorrow.
Kong said this is in anticipation that the government will approve the fuel cost pass-through (FCPT) formula for Tenaga.
Kong said RHB believes the government will have to compensate Tenaga via the
FCPT scheme. This is on expectation of costlier natural gas as policy makers' reduce fuel subsidies.
Tenaga is expected to announce its fourth quarter and full-year results this October 31.
Bloomberg consensus average estimates show that Tenaga might have posted a net profit of RM4.17 billion on revenue of RM37.09 billion in financial year (FY) ended August 31, 2013.
This compares to an FY12 net profit and revenue of RM4.2 billion and RM35.85 billion respectively.