Upcoming TPA to have neutral impact to Petronas Gas

KUCHING: The upcoming Third Party Access (TPA) framework has been projected to have a neutral impact to Petronas Gas Bhd (Petronas Gas) as the new Pakatan Harapan (PH) government may protect Petronas Gas’ interest to ensure earnings certainty.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) still believed the upcoming TPA will have a neutral impact to Petronas Gas as it does not impact the public directly given that it deals only with businesses.

According to Kenanga Research, share price of Petronas Gas continued to come under pressure since 2017 as the TPA framework was delayed to next year, which raised concerns that it could severely impact the group’s earnings on lower rate while processing income would be lower as customers may opt to import their own gas supply.

“In our opinion, being a Petronas company, the new PH government may protect Petronas Gas’ interest to ensure earnings certainty,” the research arm said.

It further noted that based on experiences of imbalance cost passthrough (ICPT) and gas CPT (GCPT) mechanisms, Tenaga Nasional Bhd and Gas Malaysia Bhd suffered no negative impact with fuel and gas costs passed through to end-users eventually.

“As such, the TPA could turn out neutral for Petronas Gas.”

On another note, Affin Hwang Investment Bank highlighted that the tariff discussion with the Energy Commission (EC) remains on-going. THE Kuala Lumpur Tin Market ( KLTM) rebounded yesterday, closing US$ 100 higher at US$ 18,700 a tonne due to technical correction, said a dealer.

He said this was supported by THE Malaysian rubber market closed mixed to lower amid lower crude oil prices, a dealer said.

She said, however, losses were capped by a slight recovery in rubber prices on the benchmark Tokyo Commodity Exchange renewed negotiations between Beijing and Washington on the trade deal expected to take place next week.

“This has managed to increase the price slightly after declining for more than ( TOCOM), aided by bargain hunting activities coupled with a weaker ringgit against the US dollar.

“The market was also supported by news on floods that hit Kerala state, the biggest rubber one week,” he said.

The LME tin price inched up US$ 360 to US$ 18,720 a tonne.

The KLTM was supported by buyers from China, South Korea, Japan, Taiwan, Germany, Bangladesh and Pakistan. producer in India,” she added. At 12pm, the Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 slid 0.5 sen to 541.5 sen per kg, while latex-inbulk added one sen to 405.5 sen per kg.