TURKISH LIRA’S WOES HIT IHH AND MAHB SHARES
Currency’s weakness will affect IHH’s earnings significantly, says economist
KHAZANAH Nasional Bhd’s listed firms, IHH Healthcare Bhd and Malaysia Airports Holdings Bhd (MAHB), hogged the limelight on Bursa Malaysia yesterday after Turkey’s lira took a dive at the weekend.
IHH and MAHB, which have significant operations in Turkey, were among the top losers in early trade when the lira plunged to nearly an all-time low after the country’s central bank head was replaced at the weekend.
IHH fell as much as 19 sen before ending 17 sen, or 3.1 per cent, lower at RM5.31 and MAHB eased 10 sen, or 1.51 per cent, to RM6.54 after hitting a low of RM6.46 at 4.15pm.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said IHH and MAHB face “heavy losses” due to their exposure in Turkey.
“To illustrate this further, Turkey’s leading private healthcare provider, Achibadem Holdings, contributed around 25 per cent of IHH group’s revenue last year.
“Therefore, a depreciation of the lira will significantly impact its revenue visibility,” he told the New Straits Times.
Adam said the selldown on MAHB was more of a knee-jerk reaction.
“MAHB generates around 20 to 30 per cent of its total revenue from Turkey’s Istanbul Sabiha Gokcen International Airport.
“However, the revenue from
Turkish operations are primarily generated in euros (around 80 to 85 per cent), while the operating expenses are denominated in the Turkish lira. Therefore, the impact from the tumbling lira is not that profound on MAHB’s Turkish operations,” he said.
The Turkish lira collapsed more than 17 per cent yesterday after President Recep Tayyip Erdogan sacked the country’s market-friendly central bank chief, Naci Agbal, according to AFP.
Agbal was replaced by former ruling party lawmaker Sahap Kavcioglu.
The lira had fallen to as low as
8.47 per US dollar in early trade yesterday, having closed at 7.22 at the end of last week.
Investors took fright at Friday’s move which had thrown the independence of the Turkish central bank into question and raised fears of a new bout of financial turbulence in the country.
Bursa Malaysia closed easier yesterday as investors focused on the cues from international markets while a lack of news locally dampened investors’ appetite.
The key benchmark FTSE Bursa Malaysia KLCI closed 9.46 points, or 0.58 per cent, lower to 1,616.73 points.