KUALA LUMPUR (June 9): Tenaga Nasional Bhd (TNB) shares slid as much as 2.1% or 28 sen in intraday trading today, as the ringgit continues to weaken.

As at 3.15pm, TNB (fundamental: 1.3; valuation: 1.8) fell 1.35% to RM13.18, with 3.78 million shares changing hands, making it the third top decliner on Bursa Malaysia.

Yesterday, the ringgit slid to a nine-year low versus the US dollar to 3.7720, with analysts predicting that it may depreciate to 3.80 in the near term, and weaken further to 3.90 in the event of an ‘unfavourable sovereign rerating’. Nevertheless, in an interview with Bloomberg yesterday, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz had said that the ringgit weakness doesn’t reflect economic fundamentals and the depreciation should be temporary.

An analyst said significant portion of TNB’s debts are in the US dollar, which may have been a factor to the decline in its share price.

“I think that what most people are concerned about is that over 20% of TNB’s borrowings are in the US dollar,” the analyst told theedgemarkets.com over the telephone today.

However, the analyst pointed out that the weak ringgit may not be the main cause for the drop, attributing it to concerns over the political situation.

“To me, this [the weak ringgit] is not a big factor [to TNB’s drop in share price]. I cannot find any other major reason other than 1Malaysia Development Bhd's (debt concerns) for the drop in TNB’s share price today," he added.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)