Market Focus
Higher electricity rates

Higher than expected electricity tariff hike positive for Tenaga Nasional; more than offsets higher gas cost. Manufacturers (cement, petrochemicals), airports and REITs to incur higher cost. Glove manufacturers to see temporary earnings weakness. Resulting inflation may crimp consumer spending.
 

Tenaga Nasional; Buy; RM9.86
Price Target: RM11.40 (prev RM10.80); TNB MK
Tariff hike in 2014

15% tariff hike more than compensate for fuel cost increases. Outlook remains promising with rising energy demand and capacity growth. Next catalyst is approval of regulated return. Maintain BUY rating; raised TP to RM11.40.

Source: HwangDBS Research - 3 Dec 2013