Hot Stocks YTL Corp, YTL Power fall after series of negative news

by **Cals** Thu 19 Jun 2014, 03:15

Hot Stocks YTL Corp, YTL Power fall after series of negative news

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Wednesday, 18 June 2014 16:31

KUALA LUMPUR (June 18): YTL Corporation Bhd and YTL Power International Bhd saw declines in their share prices after being hit by a series of negative news.

At 4.11pm, YTL Corporation was traded at RM1.57, falling 2 sen or 1.3% with some 19.5 million shares done. The stock had earlier fallen as much as 3 sen or 2%.

YTL Power declined 1 sen or 0.7% to trade at RM1.47 with some 4.1 million shares traded.

YTL Power had announced earlier today its decision to withdraw from the proposed Project 4A development which was earlier awarded by the Energy Commission (EC) via direct negotiations.

In response to the development, RHB Research Institute Sdn Bhd lowered the fair value (FV) of the stock to RM1.54, from RM1.71.

The research house said that the decision should encourage a competitive operating environment, but may spark negative reactions to its share price in the near-term.

“Although we have yet to factor in any contribution from Project 4A into YTL Power’s valuations, we foresee a negative knee-jerk reaction to its share price over this latest development,” said RHB.

The research house believes that the EC will rescind the award, and call for a competitive bidding exercise in which YTL Power will participate.

Meanwhile, the YTL Group and perhaps its Managing Director Tan Sri Francis Yeoh may come under fire again as the Malay Economic Action Council (MTEM) holds a special press conference on YTL tomorrow.

The press conference entitled: “The failure of YTL in strengthening the National Economic Agenda”, will be held tomorrow afternoon at House MTEM.

Recently, YTL Corp’s Francis Yeoh came under fire after he said Malaysia needed to do away with “crony capitalism” like foreign countries, although Yeoh himself was widely seen as a crony of former Prime Minister Tun Dr Mahathir Mohamad who granted the IPP concession to YTL.

Yesterday, YTL also suffered an attack from an opposition Member of Parliament.

DAP’s Member of Parliament Steven Sim called for the Public Accounts Committee (PAC) and the Auditor General (AG) to “investigate and re-assess” the express rail link project (ERL) linking klia to klia2.

He said the transport minister must answer why ERL Sdn. Bhd had been given preferential treatment to build the rail and make additional profits after that.

“The Minister must answer why ERL Sdn Bhd was given such preferential treatment: first by being paid RM100 million as contractor to build the rail, and then allowed to use the rail to make an additional profit of RM89 million per annum after that,” Sim said.

ERL Sdn Bhd is owned 50% by YTL Corporation Bhd, 40% by Lembaga Tabung Haji and 10% by Trisilco Equity Sdn Bhd.