KUALA LUMPUR – Gamuda Bhd’s shares were slightly lower this morning despite news on its proposal to have its four tolled highways acquired by a highway trust for RM5.2 billion.
At 10.17am, the counter eased one sen to RM3.49, with 49,000 shares changing hands.
The infrastructure and property development group was reported to have put forward a proposal to the government to dispose of four of its highway concessions to a highway trust, to be known as Amanah Lebuhraya Sdn Bhd.
The trust will fund the acquisitions by raising monies from bond investors with a promised annual return of between 4.0% and 5.0%, backed by cash flows from the tolls without any need for government guarantees.
In a note today, Kenanga Investment Bank Bhd said the highway trust is a good idea as it benefits not only Gamuda and the government, but also, to a lesser extent, businesses and citizens here and in Selangor.
“By undertaking this proposal, we see the government being the greatest beneficiary as it gets to save on toll compensations totalling RM5.3 billion over the toll concessions’ remaining tenures.
“(It will) also indirectly help Gamuda raise private funding initiative equity to jump-start the intended Mass Rapid Transit Line 3 (MRT3) project.
“This means less fiscal burden while stimulating the economy at the same time,” it said.
The research firm also believes that the new proposal is better than the proposed 2019 model – where the government was required to be a guarantor and suggested a congestion charge model that could be disruptive towards traffic flow on competing highways/public transport.
As such, Kenanga Investment has kept its “outperform” call on Gamuda’s shares, with a target price of RM4.17.
Meanwhile, CGS-CIMB Securities said that Gamuda might use the sales proceeds to partly fund the 10-year Penang South Islands project and there could also be a special dividend payout.
It has maintained its “add” call on the group’s shares while discounting the target price by 10% to RM4.18 per share. – Bernama, May 10, 2021
