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Wednesday, 12 July 2017

Edra Power expected, target listed on Bursa Malaysia; list to raise RM5.00 billion.

Image result for Edra Power Holdings Sdn Bhd
INDEPENDENT power producer (IPP) Edra Power Holdings Sdn Bhd is expected to list on the Main Market of Bursa Malaysia in November.

Sources said the company, which is the second-largest IPP in Malaysia, was expected to raise more than RM5 billion from the listing exercise.

Analysts said "Edra Power will be a cherry on the cake for Malaysia's economic rebound story" since the proposed listing came amid positive economic indicators, including robust growth and exports and a stronger ringgit.

The World Bank revised Malaysia's economic growth forecast to 4.9 per cent this year from 4.4 per cent previously, much higher than the government's estimates due to a stellar first-quarter performance.

Also contributing to the positive sentiment is the ringgit, the strongest major Asian currency in the first quarter.

This was due to the strong inflow of foreign funds to the stock market, which staged a two-year high closing above 1,787 points early last month, as well as due to positive corporate earnings.

Analysts said market consensus was that the run-up on Bursa Malaysia bode well for Edra Power's listing price which, although had not been fixed, would make the initial public offering (IPO) pipeline come alive again.

This is in view that Edra Power will a "blockbuster" IPO with cornerstone fund managers, such as the Employees Provident Fund, Retirement Fund Inc, Tabung Haji and Khazanah Nasional Bhd.

"It will be a much sought-after flagship listing, which will also attract retail investors," said an analyst.

He said China General Nuclear Power Corp (CGN), which wholly-owns Edra Power, might release about 35 to 40 per cent of its shares into the market as part of the listing exercise.

"They are looking at returning ownership of the company to Malaysians, which is a natural evolution in the capital market. Malaysians will take the first bite in what is surely an internationally-renowned company in clean energy," he said.

Malaysians would have much to gain as Edra Power has connections with local and international utility companies.

As a leading global nuclear energy company, CGN has investments of more than 25 gigawatts in clean and renewable energy projects.

The projects include wind, solar, hydro, gas-fired, efficient coal-fired and fuel-cell powered projects in China, South Korea, Singapore, the United Kingdom, France and Australia.

Since CGN took over Edra Power last year, it has grown its investments in Malaysia. For instance, the company is on track to build a pilot large-scale solar photovoltaic plant, which has a generating capacity of 50 megawatts (MW), in Kedah by early next year.

Known as Kedah Solar Project, it will turn Kuala Ketil into an industrial site which produces renewable energy, thus creating a positive impact on the state's economic growth.

Edra Power will also develop Malaysia's largest combined cycle gas turbine (CCGT) power plant in Alor Gajah, Melaka, which has a capacity of 2,242MW. The plant will deliver the most cost-effective conversion of fuel to electricity.

"It will be exciting times again for investors wanting to be part of high growth which Edra Power can offer through its public listing," said the analyst.

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