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AWSJ AWise: Ringgit Fears Keep Investors Away - Bakun Rumor Hurts TNB
By Mark Thompson
9/5/2001 8:38 pm Wed
[Rencana ini membongkar penghapusan levi tidak berfungsi -
sekaligus menampakkan kedunguan 'diktator yang baik' itu lagi.
Saham melonjak sedikit pada awal minggu tetapi ia menjunam
kembali di paras yang lebih rendah lagi. Kebimbangan ringgit
akan dinilai semula serta khabar angin yang disebar oleh Mahathir
sendiri mengenai penglibatan Tenaga Nasional dalam Bakun dikatakan
punca semakin sakit BSKL ketika ini walaupun sudah menerima satu dos
penghapusan levi dan satu sudu kelonggaran pelabur luar membeli
hartanah sebelumnya. Inilah bahananya bila Daim sudah pergi -
setidak-tidaknya boleh juga dia bertekak dengan Mahathir walaupun
dia pun dua kali lima penyangak juga.
Perenggan terakhir rencana ini menyebut:
Keuntungan hadapan begitu sukar untuk tiba jika dilihat
kepada prestasi pasaran Malaysia minggu lepas. Indeks BSKL
melonjak hampir 5% pada hari Khamis
selepas berita mampusnya kawalan modal tersiar. Tetapi
indeks itu berakhir sedikit rendah dari tahap ia bermula
pada hari Isnin untuk jatuh keparasnya 60% lebih rendah dari
paras tertingginya 5 tahun sudah"
Jangan lupa untuk membaca kisah Mahathir menyebar khabar
angin sehingga menggelabah pengurusan TNB dibuatnya.
7 May 2001 15:30 (GMT +08:00)
If Malaysian officials thought their move last week to lift the last vestige
of capital controls would unleash an inflow of foreign money, they are
likely to be disappointed. Foreign fund managers have a number of
serious reservations about Malaysia, as they have made clear in
Capital controls have long been one major deterrent to foreign
investment in Malaysian stocks. But concern about a possible
devaluation of the ringgit has loomed larger in recent months.
Ironically, the sudden move last week to abolish a 10% exit tax on
stock market profits, bringing to a close an era that began with the
abrupt introduction of capital controls in September 1998, may only
heighten suspicions about Malaysia's erratic leadership. As Hugh
Young, managing director of Singapore-based Aberdeen Asset
Management, said in an interview published earlier this year: "In
Malaysia, the perception is that one man or group at the top changes
the rules," and that lack of predictability disturbs investors.
As a result, though Prime Minister Mahathir Mohamad insists he has
no intention of lowering the fixed rate of 3.80 Malaysian ringgit to the
dollar, many fund managers believe a devaluation is all but inevitable
in the face of a shrinking U.S. appetite for imports. "The risk of a
re-pegging is rising given the recent weakness in regional
currencies," noted Charlotte Yew, manager of Jardine Matheson's
Malaysia Fund and ASEAN Fund. "With the external environment
slowing, the authorities may come under pressure to reduce the value
of the ringgit so that Malaysia can gain market share," according to an
April Investec report. Foreign investors, the report concluded, "will not
want to buy Malaysian stocks just before a devaluation in the
Political turmoil is another cause for concern. "Chaos and violence are
not images that appeal to [foreign] investors -- though most of them
expect Mahathir will be squeezed out before that happens," a recent
report from the Warburg Pincus funds noted. "Until then, they plan to
limit their exposure to his whims."
That said, the meager Malaysian weighting in many regional mutual
funds has nowhere to go but up. In the $269 million Fidelity Southeast
Asia Fund, for example, Malaysia at last report ranked fifth of five
countries -- with a weighting of just 1.1%. The removal of capital
controls could be an excuse for such funds to become at least
somewhat less underweight. Among the Malaysian stocks that might
benefit from an inflow of foreign funds are those that have already
passed muster with wary foreign analysts.
Despite their reservations about the country, managers of the $46
million Warburg Pincus Emerging Markets Fund at last report made
exceptions for six Malaysian stocks. Three of them were resort, hotel
and gaming operators Genting Berhad, Resorts World Berhad, and
All three stocks have lost more than 40% over the past year, but news
about the lifting of capital controls sent them soaring at least for a day
or two last week. Resorts World surged 15% and Genting and Tanjong
jumped 8% after the policy change was announced. But by the time
the market closed on Friday, they were a percent or two below where
they had started the week.
In their otherwise critical recent report on Malaysia, the Warburg
Pincus managers suggested that intrepid investors willing to venture
into the country should consider the financial sector. The Warburg
fund's top pick in the sector is Malayan Banking Berhad, a commercial
and merchant bank with offices in Singapore, Hong Kong and the
United Kingdom. The Jardine Matheson funds' favorite Malaysian bank
is Public Bank Berhad, which is involved in merchant banking,
leasing, financing, stock broking and related financial services. Both
banks have lost more than 30% over the past year but gained 3% last
Malaysia International Shipping Corp., which owns and operates 127
ships, is another top Malaysian holding in the Jardine Matheson
Malaysia and ASEAN funds. It has the rare distinction among
Malaysian stocks of boasting a gain in value over the 52-week period
ending last week -- albeit just 1%.
Further gains could be hard to come by, judging from the Malaysian
market's performance last week. The Kuala Lumpur Composite Index
jumped nearly 5% on Thursday after the news about the demise of
capital controls broke. But it ended the week slightly below where it
started on Monday and more than 60% below its highs of five years
The Business Times, Singapore
Tenaga share price hit by talk it will control Bakun dam
Dr M says it will own majority stake; Tenaga denies this
By Eddie Toh
CONFUSION reigned over the role Tenaga Nasional will play in the
controversial Bakun hydroelectric dam project in Sarawak after a day
of conflicting statements by the Prime Minister and the national
Malaysian Prime Minister Mahathir Mohamad surprised the market when he
told reporters yesterday: 'Tenaga will own most of Bakun if Tenaga
wants to invest.'
Barely two hours later, Tenaga chairman Jamaludin Jarjis said the
listed giant, which is 64 per cent controlled by the Ministry of
Finance and two of its agencies, will only have a minority stake in
Bakun. 'I have to clarify what he meant,' Mr Jamaludin said. 'Today
the government confirmed that they will consider Tenaga's offers,
including the offer to take up a small equity stake in the project.'
The confusion, as well as the Cabinet's decision on Wednesday to leave
electricity tariffs unchanged until the year-end, sent Tenaga's share
price reeling to RM8.70, down RM1.10 or a hefty 11 per cent.
The price fall of Malaysia's largest company exacerbated the fall of
the broader market yesterday. The Kuala Lumpur Stock Exchange
Composite Index shed 29.67 points or 4.9 per cent to 576.99 points.
Other analysts attributed the sharp fall to local traders squaring off
their positions ahead of the settlement on Monday as they noted that
the scrapping of the 10-per cent exit levy on Wednesday did not
generate much foreign interest.
But some said the market may consolidate following the short-lived
rally due to lingering concerns of the falling reserves and the wobbly
ringgit peg. But the focus yesterday was on Tenaga, the biggest price
loser. Critics have pointed out that the RM9 billion (S$4.3 billion)
Bakun project, which was revived this year, will not be viable.
'The market won't like it if Tenaga gets involved in Bakun. They
didn't get their tariff increase, their gearing is high and Bakun is
not viable,' Bloomberg quoted Chan Eu-Ky of Dresdner Kleinwort
Wasserstein as saying.
Another analyst said Tenaga will be hard-pressed to raise more funds
to finance any acquisition of Bakun although the government has
dropped the plan to build a 670-km submarine cable to transfer
electricity from Sarawak to the Malaysian peninsula. Tenaga's
long-term borrowings hover around RM27 billion, nearly double its
But Dr Mahathir has a different view. He said yesterday companies like
aluminium smelters in California may relocate to Sarawak following the
power outages there. As smelters are major power consumers, the dam
project will benefit from their presence.
He also said the Malaysian government will halt power pooling and will
not be 'hasty' in the privatisation of power generation assets to
avoid the fiasco in California. 'So don't be too harsh on us if we
have a blackout,' he told the 3,000-odd Tenaga employees.
He added: 'Maybe the California blackout is bad luck. Nobody is
perfect. Even the Titanic sank.'
Malaysia suffered a crippling blackout in 1995 and has since taken
steps towards power pooling and the privatisation of Tenaga's power
generation assets. However, the government cancelled the plan to pool
energy with the handful of independent power producers in the wake of
the energy crisis in California.
According to an earlier report, Tenaga said power outages in the
American state showed that power pooling, where companies buy their
power in the open market, has not benefited consumers.
California's 1996 deregulation law required electric utilities PG&E
Corp and Edison International to sell off their power plants and buy
electricity on the open market.
Higher fuel prices, a drop in imported electricity from other states
and too few power plants, have caused the price of electricity the two
utilities buy to quadruple this year, bringing them to the brink of
The Asian Wall Street Journal
Tenaga Nasional Contradicts Mahathir on Stake in Bakun Dam
By AZIZUL SHAMSUDDIN
Dow Jones Newswires
KUALA LUMPUR, Malaysia -- National utility Tenaga Nasional Bhd. Friday
said it has offered to take "a small equity stake" in the
multibillion-ringgit Bakun hydroelectric dam project.
The press statement from the company is in contrast to what Prime
Minister Mahathir Mohamad said earlier in the day. "Tenaga will
probably own most of Bakun Dam, as Bakun is now looking brighter," Mr.
Mahathir said in a news conference.
"Today the government confirmed that they will consider Tenaga
Nasional's offer including the offer to take up a small equity stake
in the project," Tenaga said in a statement.
Other than the offer to take up stake in Bakun project, Tenaga
Nasional said it also has offered its assistance in the project
management and engineering services, development and management of the
Trans-Borneo transmission lines.
"In addition, Tenaga Nasional will also assist in the operations and
maintenance of the [Bakun] hydroelectric station to ensure proper
implementation of the facilities involved," it said.
Mr. Mahathir's earlier remarks on Tenaga Nasional's possible equity
involvement in the Bakun dam pushed Tenaga Nasional's share price down
11% to 8.70 ringgit at the close of trading Friday.
Analysts said some foreign institutional funds sold their holdings in
the utility Friday following Mahathir's remarks as they fear the
debt-laden company will need to fork out a large sum to build the dam.
Tenaga has about 27 billion ringgit ($7.1 billion) in debt.
The Bakun dam project is estimated to cost between eight million
ringgit and 10 billion ringgit.
Write to Azizul Shamsuddin at email@example.com