The stocks of water assets and services-related companies rose sharply in heavy trading, with Bursa Malaysia Securities issuing an unusual market activity query to Puncak Niaga Holdings Bhddue to the sharp rise in the price of the company’s shares.
Puncak Niaga told Bursa Malaysia that it was not aware of any developments that might account for the unusual price movements.
Analysts contacted by StarBiz said they were “perplexed” by the movement of the stocks.
Puncak Niaga closed 44 sen higher to RM1.89 yesterday, with 30.9 million shares changing hands.
Kumpulan Perangsang Selangor Bhd (KPS) closed 27 sen higher at RM1.39, with 23.3 million shares changing hands. State-controlledKumpulan Hartanah Selangor Bhd (KHSB) closed 27 sen higher at 78 sen, with 113.9 million shares changing hands. Water management solutions provider JAKS Resources Bhd closed 14 sen higher at 72 sen, with 45.6 million shares traded.
In a statement on Tuesday, the Selangor government had reiterated that it supported the Water Services Industry Act (WSIA) 2006, which was to enable better regulation of water services and infrastruture.
The statement said there were weaknesses in privatisation which had “failed to provide quality water services and infrastruture at reasonable costs to the consumer.”
The Selangor government said it was ready to discuss the restructuring of the water services industry with Pengurusan Aset Air Bhd (PAAB orWater Asset Management Co, which is a unit of the Minister of Finance Inc) to take over the state’s water assets valued at more than RM12bil, and subsequently, hand the water services assets over to a state-owned subsidiary.
On Tuesday, StarBiz reported that PAAB was likely to complete its acquisition of part of the water assets in Perak in the first quarter of this year.
Industry sources had said that PAAB was likely to sign an agreement with Perak over the next two months, as it was already in advanced talks with the state government.
The cost of acquiring the water assets in Perak is estimated to be over RM650mil.
PAAB has been entrusted with the restructuring and consolidation of the country’s fragmented water sector by taking over the assets and making state concessionaires asset-light, thus allowing them to focus on treatment and distribution.
Currently, five of 12 states in the peninsula - Johor, Malacca, Negri Sembilan, Penang and Perlis - have restructured their water services industry.
With the acquisition of the five state assets, PAAB has nearly RM7.7bil worth of water assets in its books.
Last June, the Penang government transferred RM655.2mil worth of water-related assets to PAAB in exchange for a complete restructuring of the outstanding loans owed by the state.
The Federal Government has warned that Selangor, Kuala Lumpur and Putrajaya would face an impending water shortage in 2014.
The Selangor government, on the other hand, assures that there is enough water to last until 2019.
