KUALA LUMPUR (March 10): Shares of Puncak Niaga Holdings Bhd fell 4.44% at mid-morning Tuesday as investors reacted negatively to the lapsed Selangor water agreement.

At 10.09am, Puncak (fundamental: 1.90, valuation: 2.40) lost 12 sen to RM2.58 with 1.14 million shares done.

AffinHwang Capital Reseach has maintained its “hold” rating on Puncak with an unchanged target price of RM2.90, saying the uncertainty surrounding Puncak’s water asset disposal is negative given that Puncak’s continuing operations (namely O&G) is facing headwinds.

“But we note that Puncak has yet to receive any updates from Air Selangor for the disposal of Puncak’s water assets.

“We view negatively that Puncak’s sale and purchase agreement with Air Selangor for Puncak to sell its water treatment and distribution assets is now void, according to Selangor’s Menteri Besar (Chief Minister) Mohamed Azmin Ali after the state government had declined to give a third extension to the master water agreement, which lapsed yesterday,” it said.

(Notes: 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.)