In a Malay Mail interview yesterday, the Energy, Green Technology and Water Minister said that the Federal Government and Selangor State Government will try to complete the restructuring of the state’s water industry in 60 days. We, however, maintain NEUTRAL, with our TP unchanged at MYR2.61 (2% upside) on Puncak Niaga until we see concrete development that the duo have sorted out their differences.

• The minister makes his stance. Datuk Seri Dr Maximus Ongkili confirmed that the master agreement on the proposed consolidation of Selangor’s water industry has now been reactivated following his meeting with the Menteri Besar of Selangor, Dato' Mohamed Azmin Aliearlier on. The minister is now looking to complete the consolidation exercise within the next 60 days, while adding that the Selangor State Government was now committed to expediting the issuance of necessary approvals for the construction of the Langat 2 water treatment plant.
• State Government expect changes to previous agreement. In a separate interview with The Sun yesterday, Dato’ Azmin acknowledged that the meeting with the minister had been fruitful. He pointed ut, however, that the State Government stood firm on its position, although the Federal Government had put forth some issues pertaining to the previous master agreement. He added that the minister would table the latest amendments to the Cabinet next week and he expects the current deadlock to be resolved by mid-June.
• Sorting out differences. While we find positives in the duo sitting down together for the first time , we would like to hear more affirmativeindications from both parties involved in addressing previous contentions. Local media reported that previous negotiation delays were mainly attributed to the dispute over the land ownership of the Semenyih and Bukit Nanas water dams, as well as the ownership of water distribution pipes encroaching on both federal and state-owned lands.
• Maintain NEUTRAL. All in, we maintain our NEUTRAL stance on Puncak Niaga and our SOP-based MYR2.61 TP, pegged at an unchanged 35% discount.