KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
The extension of a groundbreaking deal by Singapore to import hydropower from Laos has hit a snag due to disagreements over transmission through Malaysia and Thailand, according to regional government sources.
Background:
- LTMS Project: The Lao PDR-Thailand-Malaysia-Singapore (LTMS) Project, signed in 2022, aimed to supply up to 100 megawatts (MW) of electricity from Laos to Singapore via Thailand and Malaysia. The project was hailed as a "historic" step towards reducing reliance on fossil fuels.
- Original Agreement: The initial agreement was valid for two years, ending on June 22, 2024. It included payment for transmission charges based only on the power purchased.
Current Situation:
- Renewal Efforts: The power retail arm of Singapore's Keppel Ltd and Electricite du Laos (EDL) signed a renewal agreement on June 24. However, Singapore has yet to secure transmission agreements with Thailand and Malaysia.
- Disagreements: The key issue is the quantity of power to be purchased. Thailand and Malaysia have requested Singapore to guarantee the purchase of a fixed amount of electricity to cover transmission costs, a condition that Singapore has refused.
- Deadline: Singapore, Malaysia, and Thailand have until December 31 to sign transmission agreements. However, sources involved in the negotiations believe a final agreement is unlikely.
Challenges:
- Competition for Renewable Energy: The extension of the deal is complicated by competition among economies for access to renewable electricity.
- Thailand’s Position: In December, Thailand's prime minister indicated that the country would prioritize purchasing the power itself rather than allowing it to pass through to Singapore. Thai officials at a recent meeting in Vientiane mentioned awaiting policy directions from the government, making an approval for the LTMS extension seem unlikely.
- Political Influence: "Nobody wants to defy the words of the PM," a source noted, highlighting the influence of political decisions on the negotiations.
Responses:
- Authorities: The Energy Market Authority of Singapore and the state-run utilities of Thailand, Malaysia, and Laos did not respond to requests for comment.
- Keppel: A spokesperson for Keppel stated that the company does not comment on "market talk."
Future Prospects:
The LTMS project's future is uncertain, with negotiations at a standstill and no clear path forward. The disagreement over transmission terms underscores the complexities of regional energy cooperation and the competitive landscape for renewable energy resources.
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