Puncak extends losses....

 

• PETALING JAYA: Despite sounding like a tough sell, the steep plunge in Puncak Niaga Holdings Bhd’s share price in recent days could be an opportunity for investors to pick up the stock at lower levels, according to analysts at CIMB Research and RHB Research Institute.
• Kenanga Research and AmResearch, however, are not too optimistic about the stock’s near-term prospect, citing concerns that the long-drawn-out water impasse in Selangor would probably have a long way to go before it could be resolved.
• Shares in Puncak Niaga tumbled by as much as 7.3% yesterday after the deadline for the Selangor government’s fifth offer to take over the water assets in the state lapsed on Wednesday without any firm takers.
• The stock extended its losses to a third day in a row, closing down 12 sen, or 3.65%, to RM3.17 – its lowest level in two months.
• Puncak Niaga said yesterday it had agreed in principle to sell its water assets to Selangor, but had given the state investment arm Kumpulan Darul Ehsan Bhd (KDEB) seven days to improve its offer.
• “The positive twist is that Puncak Niaga is now willing to strike a deal with the state,” CIMB Research said.
• “The sector and Puncak Niaga are still worth a trade, as newsflow on the takeover heats up in the short term.”
• Meanwhile, RHB Research said it was disappointed that the water deal had not gone through, but remained hopeful that Selangor’s proposed consolidation of its water assets “would be completed sooner rather than later”.
• The firm has kept its “buy” call on Puncak Niaga, with an unchanged fair value of RM5.22.
• Both Puncak Niaga and Kumpulan Perangsang Selangor Bhd said yesterday they had accepted the takeover offer from KDEB with conditions, while Gamuda Bhd said it was unable to consider the offer, pending clarifications from KDEB.
• In the latest response to the new offer from KDEB, the concessionaires are mainly seeking for payments of surplus book value of assets over liabilities, settlement of receivables and higher valuations for the equity portion.
• “At this juncture, it is safe to say that the entire takeover bid has fallen through, as it requires the acceptance by all parties,” MIDF Research said yesterday.
• “Nonetheless, the hope of revival still remains, should KDEB agree to comply with the offerees’ demands,” it added.
• Kenanga Research, however, has taken a negative stance from the latest development, as it sees another deadlock in the ongoing water saga.
• “Despite there being possible further upside for Puncak Niaga if all of its terms and conditions are fulfilled, uncertainty still remains at the Selangor government’s end,” it said.
• The firm yesterday downgraded its target price for the stock to RM3.24 from RM4.02 previously.
• AmResearch had already downgraded the water sector on Wednesday on anticipation of the water asset takeover not being resolved so soon.
• The research house continued to rate Puncak Niaga as “fully valued” at the current price level, it said yesterday. -- The Star