Gamuda shares plunge after Putrajaya's bid to take over highways
Gamuda Bhd's shares plunged when markets reopened this morning following Putrajaya's plan to take over the construction firm's toll concessions.
Gamuda's shares on Bursa Malaysia fell from RM3.04 to a low of RM2.65, representing a decline of 12.82 percent...
Gamuda Bhd's shares plunged when markets reopened this morning following Putrajaya's plan to take over the construction firm's toll concessions.
Gamuda's shares on Bursa Malaysia fell from RM3.04 to a low of RM2.65, representing a decline of 12.82 percent.
As of 11.15am, the shares recovered slightly to RM2.79, which is still a decline of 8.22 percent.
Quoting MIDF Amanah Investment Bank Bhd Research, the Edge Markets said the government's takeover bid of Gamuda's highways was a net negative as it would result in an "earnings vacuum."
However, the research house did not change its earnings forecast for Gamuda, stating that it was still premature to ascertain the impact.
Last Saturday, the Prime Minister's Office announced that the government has entered into talks to acquire four highways from Gamuda Bhd.
The highways are the Damansara-Puchong Expressway (LDP), Western KL Traffic Dispersal System (Sprint Expressway), Shah Alam Expressway (Kesas) and the Smart Tunnel.
The PMO said upon successful acquisition, the government plans to abolish tolls and impose a congestion charge where the rate would be up to 30 percent lower than current tolls.
It added that there would be no charges during off-peak hours between 11pm and 5am.
Umno deputy president Mohamad Hasan has decried the plan as a "bailout" for Gamuda.
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