Hot Stocks Puncak Niaga and Kumpulan Perangsang climb on water assets agreement

by **Cals** Mon 04 Aug 2014, 23:03

Hot Stocks Puncak Niaga and Kumpulan Perangsang climb on water assets agreement

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Monday, 04 August 2014 12:55

KUALA LUMPUR (Aug 4): Water-related stocks Puncak Niaga Holdings Bhd and Kumpulan Perangsang Selangor Bhd (KPS) soared in morning trade on news that the federal and Selangor governments have signing a heads of agreement (HoA) to resolve the deadlock over the water assets in Selangor.

At 11:21 am, Puncak Niaga had climbed 3.32% or 11 sen to RM3.42 with some 975,000 shares traded, while KPS was up 7.89% or 12 sen at RM1.64 with 4.2 million shares changing hands.

Last Friday, Putrajaya and Selangor signed the HoA to finalise the restructuring exercise in Selangor and the construction of the Langat 2 water treatment plant.

The agreement was in accordance with the RM9.65 billion offered to the four water concessionaires --- Syarikat Bekalan Air Selangor Bhd, Puncak Niaga (M) Sdn Bhd, Konsortium Abbas Sdn Bhd and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash).

Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said in a statement on Friday that Kumpulan Darul Ehsan Bhd (KDEB), which has been mandated to take over the operations of the water assets, has begun the process of taking over the water concessionaires, except for Splash.

Gamuda Bhd, which owns a 40% stake in Splash, has said that the RM250.6 million offer made by the Selangor government was less than 10% of Splash’s net asset value (NAV) of RM2.54 billion.

“Nevertheless, the federal government noted that it is committed to ensure negotiations continue between the state and Splash to ensure an ultimate closure for the water saga,” AmReserach said in a report today.

It added, “We understand that a revision in bulk water supply rates could result in Splash’s acceptance to an offer.”

Khalid has also given his assurance that the restructuring would not result in any increase of water tariff in the next three years and that the process would ensure uninterrupted water supply for the state.

AmReserach is maintaining its “neutral” rating in water sector. “We are not surprised with the signing of the HoA as it would mitigate any uncertainties following calls for (PKR president) Datuk Seri Dr Wan Azizah Wan Ismail to take over as menteri besar of the state.”

There are talks that the terms of the water consolidation exercise could be revised if Wan Azizah replaces Khalid as the chief executive, it said.