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Malaysia Has New Stock Leader in Tenaga: Chart of the Day

Tenaga Nasional Bhd. (TNB) is poised to overtake Malayan Banking Bhd. (MAY) as Malaysia’s biggest company by market value as the electricity generator benefits from a plunge in coal prices.

The CHART OF THE DAY shows the market capitalization of Tenaga briefly surpassed Malayan Banking for the first time in five years on Jan. 12. The power producer has rallied 15 percent in the past three months, increasing its market value to 81.8 billion ringgit ($ 22.6 billion), while Maybank, as Malaysia’s biggest lender is known, sank 8.5 percent to 82.7 billion ringgit. The lower panel tracks the benchmark price of coal at Australia’s Newcastle port.

Tenaga has turned into one of Malaysia’s biggest stock-market winners as prices of coal, a main source of feedstock to generate electricity, tumble to an eight-year low amid a wider rout in commodities. Falling crude prices prompted Malaysia, Asia’s only major oil exporter, to cut its economic growth forecast, spurring concern banks’ lending business will be hurt.

“Tenaga is attractive because prices of coal have been coming down,” Ang Kok Heng, chief investment officer at Phillip Capital Management Sdn., which manages $ 428 million, said by phone in Kuala Lumpur. “Maybank is suffering from margin compression as loan growth at banks slows.”

Tenaga is expected to enjoy net fuel cost savings of as much as 703 million ringgit this year, according to Daniel Wong, an analyst at Hong Leong Investment Bank Bhd. in a report dated Jan. 21. The company may report a 38 percent jump in first-quarter profit, according to Maybank Investment Bank Bhd. Oil-related contributions make up almost 30 percent of Malaysia’s annual state revenue.

State-controlled Tenaga’s market value is now about the same size as CLP Holdings Ltd., Hong Kong’s largest electricity supplier, which has gained 4.7 percent in the past three months. Korea Electric Power Corp., which has a capitalization of $ 24.3 billion, has fallen 14 percent in the same period.

To contact the reporter on this story: Choong En Han in Kuala Lumpur at echoong6@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Chan Tien Hin, Richard Frost

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