Record tin prices bring shine to Malaysia metal firms

Shares of tin mining firms rallied on record tin prices and the prospects of Malaysia Smelting Corp Bhd's (MSC) Singapore public offering.


The price of tin on the Kuala Lumpur Tin Market (KLTM) jumped to a record of US$27,720 (RM84,546) per tonne yesterday on concerns over tight supplies and strong demand from Europe, Japan, China and India.

This is the second time in as many days the metal hit fresh highs. On Monday, tin prices closed at US$27,500 (RM83,875) per tonne for its highest close this century.

"Tin is enjoying a rally and as with other commodity prices, it will continue to climb for at least six months," said Jupiter Securities head of research Pong Teng Siew.

Yesterday, MSC gained 4 sen to RM4.88 a share, while Majuperak Holdings Bhd was up 1 sen to 55 sen. Ho Wah Genting Bhd, after hitting an intra-day high of 60.5 sen a share, closed 3 sen lower at 53 sen a share.

Pong said in the immediate term, tin ore-related companies such as MSC and Ho Wah should benefit from the strong global demand for tin.

MSC is the world's third largest producer of tin metal, while Ho Wah plans to start tin mining operations in Perak next month.

Once a cornerstone of the Malaysian economy, tin has seen its fortune dip in recent years, with the sector being dubbed a sunset industry.

Nevertheless, with the recent bullish global demand for the metal, and MSC's planned listing in Singapore making it the only Malaysian public-listed company with a dual listing, its fortune seems to have taken a turn for the better.

"I think the MSC listing in Singapore will receive a good response, and if that happens, it will spill over to Malaysia," said Pong.

Tin stocks have been outperforming the key benchmark index on strong buying momentum. This year alone, MSC gained some 11 per cent to RM4.88, Ho

Wah Genting Bhd rose 45.2 per cent to 53 sen, while Majuperak increased 28 per cent to 55 sen.

During the same period, the 30-strong blue-chip index has lost 0.46 per cent.

Lee Cheng Hooi, head of retail research at Maybank Investment Bank Bhd, said that there is a fleeting interest in mining stocks now.

Unlike MSC, which trades above RM4, both Ho Wah and Maju Perak shares are priced below RM1, thereby regarded as penny stocks. Most retail players are often major buyers of penny stocks.

Meanwhile, Edmund Tham, Mercury Securities head of research, said interest in tin miners' shares here is dependent on international price of the metal.

"As long as metal prices go up, there will be interest here for tin miners shares," said Tham. - By Francis Fernandez, btimes.com.my