For whom the bells toll

Come 1st January 2007, the bells will toll for the pockets of motorists who use Malaysia highways frequently. This is because fares on five highways are set to rise from 1st January 2007. The Malaysian Works Minister was quoted in the local media as saying that the government will withdraw subsidies paid to concession holders running the highways. One of the affected highways is the Karak Highway operated by MTD InfraPerdana of the MTD Capital Berhad (KUL:9032).

MTD Capital was featured in April this year when we felt that the Singapore market featured few opportunities. MTD Capital was then trading at a steep discount to its three listed subsidaries. Over the space of the seven months, this discount has since narrowed as MTD Capital has rallied by about 14% from RM1.88 to RM2.14.