Friday 29 Mar 2024
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KUALA LUMPUR (Oct 15): Most highway operators dropped as investors taking profit and betting on government may review the toll rates.

At 10.20 am, LDP highway concessionaire Lingkaran Trans Kota Holdings (Litrak) was traded flat at RM5.20, with 13,700 shares traded, while Ekovest Bhd rose 1 sen to RM1, with 12,000 shares changed hands.

Other highway operators opened and traded low. Gamuda dropped 2 sen to RM4.77, with 332,200 shares changed hands;  IJM Corp fell 3 sen to RM3.32, with 1.32 shares traded.

“’Rakyat’ are complaining about the toll rates hike, so investors are taking profit on government may review the toll rates later,” said an investment manager.

However, CIMB Research maintained “overweight” on contruction’s industry, and saw Gamuda and IJM Corp, which owned major highway concession assets, as top picks.

It recommended “add” on Gamuda and IJM Corp, with target prices of RM5.88 and RM3.82.

“Gamuda is the concession owner of four of the 17 major highways that are granted toll increases. SMART, LDP, LKSA and Sprint will raise toll rates by 30-50%. Highway concessions make up 23% of its RNAV and 17% of earnings.

“IJM Corp is the concession owner of three of the 17 major highways that will raise toll rates. NPE, Besraya and Lekas have been granted toll increases of 20-44%. They constitute 17% of RNAV while total infra assets make up 20% of pretax profit,” it said.

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