KUALA LUMPUR, Dec 15 ― Tenaga Nasional Bhd’s (TNB) share price retreated this morning following news of a potential restructuring of electricity tariffs in the first half of 2023 (1H 2023).
At 10.35am, TNB’s shares declined by 0.64 per cent or six sen to RM9.28 with 211,400 shares traded.
Yesterday, Prime Minister Datuk Seri Anwar Ibrahim announced that a potential increase in electricity tariff was on the horizon for multinational companies that export, and no subsidy will be provided for selected profitable 'giant' companies.
However, he said the government will not raise the blanket electricity tariff for domestic users, small and medium enterprises, agriculture and food product sectors as it will burden the Malaysian public.
In a note, Hong Leong Investment Bank Bhd (HLIB) said the news was a positive sign as it showed the government’s willingness to restructure the subsidies, ensuring the long-term sustainability of the power sector and lowering the government’s high commitments to the subsidies.
“Despite (the news) having a neutral impact on TNB, we believe the measure will be viewed positively with regards to TNB and the power sector,” it said.
The research bank maintained its 'buy' call for TNB’s shares with an unchanged target price of RM11.65, given the group's stable earnings and dividend payout.
“We are positive with its long-term commitment to the environmental, social and corporate governance (ESG) growth path while ensuring returns to shareholders,” added HLIB. ― Bernama
