KUALA LUMPUR: FTSE Bursa Malaysia KLCI has hit a three-month high yesterday, mainly supported by key heavyweights.
The stocks among others include Press Metal Aluminium Holdings Bhd, Sime Darby Bhd, Petronas Chemicals Group Bhd, Petronas Gas Bhd and Tenaga Nasional Bhd.
Total volume was also higher with 2.31 billion shares worth RM1.99 billion changed hands from Tuesday’s 2.07 billion shares.
Market breadth was positive with 578 gainers against 334 losers, while 393 counters were unchanged, 549 untraded and 63 others suspended.
Tenaga’s shares rose after the government made several announcements which look to benefit the national power company.
As at 11am, the counter rose 14 sen to RM15.12 with 700,800 shares changing hands. It ended the day’s trading at the same price but with higher trading volume of 10.33 million shares.
On Tuesday, the government announced the continuation of tariff rebate of 1.52sen/kWh and effective tariff of 37.01 sen per kWh in Peninsula Malaysia in the first half of next year and continuation of 38.53sen per kWh base tariff under Incentive Based Regulation (IBR).
The government will subsidise the differential of RM929.4 million for the higher fuel costs.
Hong Leong Investment Bank said Tenaga’s earnings and cash flow are expected to be stable due to the implementation of the IBR/FCPT mechanisms.
The expected IBR revision to lower return on regulated assets by 2018 will be offset by new contributions from associates and power plants, it said.
Shareholders also stand to benefit from higher dividend payout, it added.
MIDF Research, on the other hand, said Tenaga remained its top sector pick with a target price of RM16.80.