Gamuda 3Q net profit up 39.6% to RM116.63m

KUALA LUMPUR: GAMUDA BHD []'s net profit for the third quarter ended April 30, 2011 rose 39.6% to RM116.63 million from RM83.53 million a year earlier due to higher contributions from all its divisions.

Revenue for the quarter rose to RM621.20 million from RM511.20 million in 2010. Earnings per share was 5.67 sen while net assets per share was RM1.77.

Gamuda declared a second interim tax-exempt dividend of 6 sen per share single-tier.

For the nine months ended April 30, Gamuda’s net profit rose 26.7% to RM299.19 million from RM236.19 million on the back of revenue RM1.86 billion.

Commenting on its prospects, Gamuda said on Thursday, June 23 that with the existing CONSTRUCTION [] projects progressing on schedule and the strong performance of the property division, the group’s results were expected to further improve in the remaining quarter of the current financial year.

Read more...

Gamuda: Buy, target price RM5.25

HwangDBS Vickers thinks Gamuda has been an 'unjustified' laggard against its closest peer, IJM Corp, and expects this underperformance to reverse this year.

BUILDER Gamuda Bhd (5398) is a "high conviction buy" as it is a strong proxy to the upcoming mass rapid transit (MRT) project at home and changes in Vietnam's property market, says HwangDBS Vickers Research.

The research house thinks Gamuda has been an "unjustified" laggard against its closest peer, IJM Corp Bhd, and expects this underperformance to reverse this year.

For one, it believes Gamuda's joint venture with MMC Corp Bhd as the project delivery partner for the RM36 billion MRT could be a prelude to clinching a lucrative RM14 billion tunneling works project that has high margins.

In Vietnam, after several false starts, Gamuda looks set to launch its RM6 billion Celadon City (Ho Chi Minh City) development in February after the Chinese New Year, and its RM10 million Gamuda City (Hanoi) in April, with total maiden sales estimated at RM700 million for this financial year.

"When ramped up, Vietnam could be a bigger earnings kicker than the MRT, with RM13.6 billion gross development value for its effective stake (MRT: RM7 billion), higher margins of 18-20 per cent (MRT: circa 10 per cent), and longer duration of 10 years (MRT: 5 years)," it said in a report yesterday.

HwangDBS also thinks Gamuda may be a frontrunner for second phase of the Durkhan highway in the Middle East, as well as the Sungai Langat 2 water treatment plant and the runway portion of the low-cost carrier terminal projects at home.

Gamuda's price closed at RM3.85, implying a 36.4 per cent upside to HwangDBS' target.

Read more: Gamuda: Buy, target price RM5.25

MRT jobs to be out in May, ahead of schedule

CONTRACTS for work on Malaysia's first mass rapid transit (MRT) line, linking Kajang and Sungai Buloh, will be awarded in May this year, an official said.

This is earlier than some analysts expected and will likely be welcomed by the market, which has been looking for projects like this, which come under the government's Economic Transformation Programme (ETP), to show progress.

The project's groundbreaking is supposed to kick off this July.

The Land Public Transport Commission chief executive officer Mohd Nur Ismal Kamal said tenders for the preliminary and main works will likely be called by Syarikat Prasarana Negara Bhd at the end of April, with the awards to be announced "around mid-May".

The Prasarana-appointed project manager, a joint venture between Gamuda Bhd and MMC Corp Bhd, will be able to give recommendations on which firms should get contracts, but it will be the government who has the final say, Nur Ismal said.

It is "not clear" yet if tenders for rollingstock, which include trains, will also be called before the project's groundbreaking, he added.

The Kajang-Sungai Buloh line, expected to be operational by 2016, is the first of possibly at least three MRT lines to come that would run a length of between 55 and 60km.

The three lines may cost RM36.6 billion in total, going by Gamuda-MMC's initial estimates in 2009, but this has yet to be determined.

Nur Ismal said the target cost for the first line is currently being worked out.

A special purpose vehicle set up by the Ministry of Finance Inc will be tasked to raise funds for this project, and possibly other infrastructure projects in future, he said.

There will be incentives for MMC-Gamuda if they can deliver the project below the target cost. Should they incur cost over-runs, however, they will have to pay up the difference, he said.

"We are highly focused on delivering the first line," he said.

Nur Ismal was speaking to reporters in Putrajaya after Prime Minister Datuk Seri Najib Razak announced 19 more projects, including the MRT, under the ETP.

More news on the second and third lines may be unveiled in late March or early April this year, he added.

"The timeline for the (first) MRT tender is slightly ahead of our expectations ... it should be viewed positively by the market," Chris Eng, head of reach at OSK Investment Bank Bhd, told Business Times.

Najib said the MRT will employ about 130,000 people at its peak construction phase and have a significant multiplier impact on associated industries.

Investment in it will see an incremental gross national income contribution of RM21.3 billion come 2020.

Read more: MRT jobs to be out in May, ahead of schedule

Govt-funded MRT

By Ooi Tee Ching

The government will set up a special vehicle company (SPV) to channel total funding for the proposed greater KL mass rapid transit (MRT) project.

Land Public Transport Commission (SPAD) chief executive officer Mohd Nur Ismal Kamal said the multi-billion ringgit project will not be undertaken on a turnkey basis and contractors need not seek financing.

"The greater KL MRT project is based on an international concept of project delivery partner, a hybrid of turnkey and project management consultancy," he told reporter at a briefing in Kuala Lumpur yesterday.

Also present at the briefing was SPAD chairman Tan Sri Syed Hamid Albar.

"I read some newspaper headlines saying MMC-Gamuda bags RM36 billion MRT project. That is factually wrong," he said.

Abdul Hamid assured that all MRT job packages will be tendered out to both local and international contractors.

"There's no room for direct negotiation. Contract awards will be based on merit, track record and financial strength of the contractor," he said.

"The MMC-Gamuda joint venture has been appointed by Syarikat Prasarana Negara Bhd as the project delivery partner. The RM36 billion figure is the construction cost estimated by MMC-Gamuda, it is not our estimate," he said.

As the project delivery partner, Nur Ismal explained that MMC-Gamuda will take on the risks and responsibilities in ensuring the MRT project is delivered on time. They will sit in with the government in the tender evaluation and appointment of contract packages.

Syed Hamid said the alignment of the Sg Buloh-KL-Kajang route will be displayed for community feedback in March 2011. A ride along the 60km line will take some 90 minutes.

The proposed MRT line will integrate with existing KTM Komuter stations in Sg Buloh and Kajang and light rail transit (LRT) stations in Kelana Jaya and Maluri. About 10km of the 60km line will be underground.

"We hope to roll out the tender for the first batch of job packages by April 2011," he said.

Read more: Govt-funded MRT

Building up to a super bull run

A super bull run is on the horizon for Malaysian construction stocks next year on optimism that the RM40 billion Mass Rapid Transit project will start in July.

The bullish outlook is also backed by new government initiatives such as the Economic Transformation Programme and the 10th Malaysia Plan, said UOB KayHian head of research Vincent Khoo.

Research houses are maintaining their overweight call on the sector.

"We expect a bull run next year," Khoo told Business Times.

An analyst from TA Research said the stock market needs news like the MRT as a catalyst for construction stocks to sustain its upbeat momentum.

He said judging from the size of the MRT project, it is certain that almost all local construction companies will benefit.

"If the government divides the project evenly, then each company could get contracts worth RM500 million to RM1 billion. This augurs well for the sector," he said.

The MRT, comprising three lines, is the largest infrastructure project in Malaysia's history. The last project announced was the RM12.5 billion double tracks.

Analysts said the first of the three MRT lines, joining Sungai Buloh and Kajang, running through Kuala Lumpur City Centre, is estimated at RM14 billion. The line will cover 60km and have 35 stations.

They said MMC-Gamuda Joint Venture Sdn Bhd may get the tunneling portion from Sungai Buloh to Kajang, worth RM6 billion to RM8 billion.

Master Builders Association Malaysia president Kwan Foh Kwai expects companies like Sunway Construction, IJM Construction, Muhibbah Engineering, Bina Puri, Loh & Loh, MRCB Engineering, UEM Builders, WCT, Ranhill and Ahmad Zaki to bid for the MRT.

Others include Eversendai Corp, Crest Builders, Putra Perdana Construction and MTD ACPI.

Ahmad Zaki managing director Datuk Wan Zakariah Muda said the MRT news is positive for the sector. "There will be spillovers and knock-on effects. We plan to participate in the MRT," he said.

An official from Putra Perdana Construction Sdn Bhd said it will eye packages to build structures, stations, bridges and tunnel lining work.

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Najib: MMC-Gamuda only allowed to tender for tunneling of MRT project

PETALING JAYA: MMC-Gamuda Joint Venture Sdn Bhd, which has been appointed the project delivery partner (PDP) for the Mass Rail Transit (MRT) project, will not be allowed to tender any of the work packages except for tunneling works.

"The government felt the exception should be made as the PDP is the only local CONSTRUCTION [] company that has experience in major tunneling works such as in the SMART Tunnel project in Kuala Lumpur and the Kaohsiung MRT project in Taiwan," said Prime Minister Datuk Seri Najib Tun Razak here on Saturday, Dec 18.

He was speaking to reporters at the RMAF base in Subang before his depature to Kuala Terengganu for a one-day official visit.

Nevertheless, Najib said the PDP would still have to compete for the work package with other companies and the award would be given on the basis of merit.

The Prime Minister also said the Cabinet has decided that Syarikat Prasarana Negara Bhd, a fully-owned subsidiary of the Ministry of Finance Incorporated, would be the infrastructure owner of the project while the Land Public Transport Commission would be the supervising authority for the project.

On the appointment of MMC-Gamuda Joint Venture as the project delivery partner, Najib said it was based on the financial standing of the two public listed companies which make up the joint venture and their strong track records and experience in the field of construction and in undertaking huge and complex rail and tunneling projects.

"The PDP will assume the role of a project manager but with the added responsibility of having to deliver the project within an agreed time and cost.

"Any cost over run and delays in project completion, which are basic common risks in projects, will be borne by the PDP," he added.

Najib said the PDP was not a turnkey contractor and the project would be divided into work packages which would be awarded individually through open tender.

"The government will make the final decision on the awarding of contracts," he added. - Bernama

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Gamuda expects nod soon for RM36bil joint MRT project

SHAH ALAM: The Cabinet has yet to approve the Gamuda Bhd-MMC Corp Bhd joint development proposal for the mass rapid transit (MRT) system, said Gamuda group managing director Datuk Lin Yun Ling.

However, he expects the proposal, which was submitted early this year, to be approved soon.

Possibly, the Gamuda-MMC joint venture will be the project delivery partner of the Government.

Read more...

GAMUDA - HDBSVR reaffirms Buy rating on Gamuda, TP RM4.90

KUALA LUMPUR: Hwang DBS Vickers Research reaffirms its Buy rating and sum-of-parts derived target price of RM4.90 for GAMUDA BHD [], which remains on its high conviction list. Its last traded price was RM3.79.

The research house said on Friday, Dec 10 Gamuda is looking to bid for the Qatar MRT project next year worth US$45bn (RM141bn). This target completion date is 2021, ahead of the FIFA World Cup in 2022.

HDBSVR said within the Middle East, Gamuda already has two projects in Qatar ' the New Doha International Airport (88% completed) and Durkhan Highway (100% completed). It is also bidding for the second phase of Durkhan Highway worth at least RM1bn together with WCT where a result should be known soon.

Gamuda's Group MD Datuk Lin Yun Ling was quoted saying he believed the company will be able to garner enough resources for both the KL MRT and Qatar MRT should it be successful in bagging both.

'While not made official, we understand the MMC-Gamuda JV will be appointed project delivery partner (PDP) for the RM36bn MRT project. This will allow it full control over the project while also bearing execution risk.

'However, what remains unclear for now is the RM14bn tunneling works which the JV is eyeing. In our view, the JV is also frontrunner to clinch this given its past expertise which is a scarcity among the local contractors,' said HDBSVR.

The research house also noted that it was not in the government's interest to delay this project by opening up the tender to foreign contractors given the MRT is an vital component of the ETP programme.

Taken from here...

Najib wants MRT project to take off by July

PUTRAJAYA: Prime Minister Datuk Seri Najib Tun Razak wants the Mass Rapid Transit (MRT) project under the Greater KL initiative to be implemented by July next year, Minister in the Prime Minister’s Department Datuk Seri Idris Jala said.

He said the technical report on the project, including the route, had been completed and would be tabled at the National Economic Council and Cabinet for scrutiny this month.

“The public will be able to give their feedback after the council decides on the technical report,” he said at a news conference here yesterday.

Present was Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin.

Idris said another project – the high-speed railway – would enter the first phase of studies for two months from early next year, to be followed by six months of detailed studies.

Meanwhile, Raja Nong Chik said the MRT route would be on federal land to avoid problems related to land acquisition while the distribution of MRT stations would be determined later.

He said among the locations to be served by the MRT lines was Kampung Baru, which would be among the focus areas of the Greater KL initiative.

The MRT system would be integrated with existing transportation systems, he said, adding that Greater KL would also cover the rehabilitation of polluted rivers in the Klang Valley and greening of the national capital with the planting of 30,000 trees next year. – Bernama

Gamuda Bhd - Maintain outperform with higher target price RM4.96

Gamuda's FY7/10 core net profit made up 91% of our full-year forecast and 83% of consensus. Despite an improved earnings before interest and tax (Ebit) margin, which anchored the 45% year-on-year (y-o-y) growth in net profit, the results were below expectations as we had overestimated associates' contributions. We cut our FY2011/12 forecasts by 4% to 6% and introduce our FY2013 numbers.

This, plus the effects of rolling forward our valuation horizon to end-2011 and applying our revised 13.8 times target market PER (15 times previously) to our construction profit component raises our RNAV-based target price from RM4.78 to RM4.96.

We reiterate our 'outperform' call with main potential re-rating catalysts being more progress and eventual approval of the MRT project. The stock remains one of our top picks for the sector.

FY2010 revenue dipped 10% y-o-y, mainly due to depleting construction jobs and despite strong property sales of RM820 million, surpassing the targeted RM800 million. However, Ebit surged 49% y-o-y while Ebit margin expanded almost two percentage points to 8.9%, boosted by all segments. At the pre-tax profit level, the construction division chalked up a y-o-y doubling of pre-tax profit and contributed 21% of group pre-tax profit. Construction pre-tax margins stood at 4.5%, and are likely to further improve in the coming quarters. Pre-tax profit from the property, expressways, and water segments grew by 15% to 28% y-o-y and accounted for 78% of group pre-tax profit. Overall core net profit grew by 45% y-o-y. No dividends were declared, which was no surprise.

During the results briefing, management sounded more optimistic about the progress of the MRT proposal, reinforced by the key deliverables of the Economic Transformation Programme (ETP). The MRT proposal is still at the consultants' evaluation stage, which is expected to be completed by end-September. Management expects more details to be unveiled during the tabling of Budget 2011 on Oct 15, with likely Cabinet approval before end-2010. Clinching the RM13 billion to RM14 billion tunnelling works would bump up the current RM6 billion outstanding order book to over RM12 billion. ' CIMB Research, Sept 29.

This article appeared in The Edge Financial Daily, September 30, 2010.

Bursa Malaysia: HWangDBS expected Gamuda FY10 to beat they forecast

Author: Durian Edge Publish date: Mon, 27 Sep 11:37

Earnings to beat expectations

•FY10 result expected to beat our forecast
•Still bidding for MRT, LRT and Qatar jobs
•BUY, raised TP to RM4.40

FY10 to beat forecast. Gamuda's full year result due 28 September will likely beat our FY10F net profit of RM270m by 5-10%; our estimate is at the low end of consensus forecasts. 4QFY10 net profit should exceed 3QFY10's RM73m to register the fourth consecutive quarter of growth. This would be driven by continued improvement in construction margins q-o-q (average of 1ppt) and RM600m unbilled sales. FY10 property sales was a record RM800m (vs RM500m in FY09) and the momentum has carried over to the first 2 months of FY11. Gamuda is guiding for RM880m local property sales for FY11 and RM820m from Vietnam. There is a risk it might not meet the Vietnam forecast because Yenso Park has not received the residential land parcel titles. But we take comfort that the market has yet to factor in any sales.

MRT and other projects. The next milestone for the RM36bn MRT project is the result of two independent consultants' report by end-September - we understand the feedback had been positive. We remain convinced this project will take off (See sector report dated 3 September).
The key risk for the MMC-Gamuda JV is the presence of foreign contractors if the tunneling portion is awarded under Swiss Challenge method. But foreigners are unlikely to be able to match the cost structure of locals, with the double tracking project setting a precedent. A realistic start date will be in mid-2011 where the tunneling portion will be part of Phase 1 (2011-2016) with the project reaching 70% completion. Other projects in the pipeline are the LRT extensions where Gamuda submitted a bid, LCCT runway and RM1.5bn Durkhan highway in Qatar.

BUY, raising TP to RM4.40. Gamuda remains our high conviction pick. We raised our TP to RM4.40 after factoring in the recent purchase of land along Jalan Pudu (RM600m GDV), where Gamuda plans to build shop offices and service apartments. At 19x 1-year forward PE and 2.1x
P/BV, valuations do not seem cheap, but they are at mean levels. We expect valuations to at least test 1SD above mean and for it to trade at premium valuations to its peers should it be awarded the MRT project. In the 2-months leading to the award of its RM12.5bn double tracking project, it traded at average 1-year forward PE of 29x and peaked at 39x a month later. Gamuda's investability will also gain traction having replaced Tanjong in the FBMKLCI.

Report by
HWANGDBS Vickers Research Sdn Bhd (128540 U)

Study on MRT to be completed early October

TECHNICAL study on the proposed mass rapid transit (MRT) project, conducted by the Land Public Transport Commission (LPTC) and a consultant appointed by the Ministry of Finance, will be completed by early October.

LPTC said a report on the technical study will be presented to the Steering Committee on the Klang Valley Integrated Transportation System headed by the Secretary-General of the Treasury.

A paper on the proposal is expected to be drawn up and tabled in Cabinet soon after that, LPTC said in a statement yesterday.

The proposed MRT system, consisting three lines running a total of 150km and covering an area within a 20km radius of central Kuala Lumpur, was initiated by a joint venture between MMC Corp Bhd and Gamuda Bhd earlier this year.

The proposed project is valued at RM36 billion, excluding the cost of land acquisition and rolling stock.

The three-month technical study on the proposal, carried out by LPTC and consultant Minconsult Sdn Bhd, began on July 1 this year.

"The technical study covers an appraisal by the two parties on the viability of the proposal. Among the areas covered were the corridor and alignment, engineering, environmental and social impacts and others," LPTC chief executive officer Mohd Nur Ismal Mohamed Kamal said in the statement.

He stressed that LPTC's key objective is to ensure the MRT project will meet the needs of the people in order to encourage increased usage of public transport.

When the technical study is completed, a further assessment called the Value Management Study (VMS) will be conducted by LPTC and the Economic Planning Unit.

The second study is required as a project of such magnitude will need early identification of opportunities to ensure its sustainability, LPTC said.

A VMS is a common approach practised globally, especially on projects that require optimisation of the funding mechanism and prudent spending.

In other words, the VMS will ensure that the MRT project is economically sustainable and optimises government spending whilst promoting public interest as its priority.

Read more: Study on MRT to be completed early October

Infrastructure players ride high on ETP hopes

Written by Surin Murugiah Wednesday, 22 September 2010 13:21


KUALA LUMPUR: Infrastructure players including Gamuda, MMC Corp, YTL Corp advanced on Wednesday, Sept 22 on expectations they would take the lead in infrastructure projects to be implemented under the Economic Transformation Programme (ETP).

The FBM KLCI rose 1.25 points to 1,477.24 at midday, lifted by gains including Gamuda, YTL Corp, Genting and MMC Corp. Gainers led losers by 347 to 299, while 270 counters traded unchanged. Volume was 789.55 million shares valued at RM1.01 billion.

Gamuda shares, call warrants and warrants totalled 81.71 million units, accounting for 10.35% of total trading volume.

.......................

OSK Research said key players involved in infrastructure development are expected to benefit from the implementation of the ETP, including the RM36 billion KL mass rapid transit (MRT) which features in the Greater Kuala Lumpur plan. They include Gamuda and MMC Corp (TRADING BUY, FV: RM2.59) for the MRT and MRCB, which may be involved in land development around KL.

Gamuda added 19 sen to RM3.94, Gamuda-WD gained 13 sen to RM1.38 and Gamuda-CM 6.5 sen to 24 sen on hopes of taking the lead in the MRT project in Kuala Lumpur. MMC Corp was up 13 sen to RM2.91 and MRCB up four sen to RM2.04.

Among the major gainers YTL Corp rose 22 sen to RM7.81 on hopes of the high speed rail link from Kuala Lumpur to Singapore.

Tradewinds added 23 sen to RM4.17, Lion Forest Industries and Wah Seong rose 19 sen each to RM1.86 and RM2.27,Genting rose eight sen to RM10.44, , Bursa up 30 sen to RM8.

Plenitude up 15 sen to RM4.89, SHL Consolidated up 13 sen to RM1.24 and E&O added nine sen to RM1.23.

Among the losers, Far East Holdings fell 38 sen to RM6.50, Tasek down 26 sen to RM6.62, Masterskill fell 20 sen to RM3.20, Top Glove lost 16 sen to RM5.39, DFZ Capital down 15 sen to RM3.60, Mudajaya fell 13 sen to RM4.25 while Boustead lost 12 sen to RM4.45.

The actives included Genting Malaysia call warrants, Gamuda call warrants, KNM, Zelan, E&O and Karambunai. Karambunai surged 36% to 7.5 sen in the morning session on a news portal report about an integrated resort in Sabah.

HDBSVR: RM36b mass rapid transit to transform local construction landscape

Written by HwangDBS Vickers Research Friday, 03 September 2010 14:17

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) expects the RM36-billion mass rapid transit (MRT) to drive the CONSTRUCTION [] sector, once it is approved and takes off.

The research house said the probability of it being approved is high as the recent subsidy cuts suggest political will.

A key turning point could be the outcome of two consultant studies in mid-September. This project could see Gamuda’s orderbook double and MMC’s triple, but all contractors will benefit given its sheer size.

“In terms of sum-of-parts accretion, we expect additional 26 sen per share for Gamuda and 17 sen for MMC. The MRT project also ties in with another anchor market theme – government land sales. We expect MRCB’s participation in the 3,400-acre RRIM land to give it pricing power beyond our assumption of RM300 psf,” it said.

Hwang DBS Vickers Research said the 10th Malaysia Plan (10MP) tabled in June 2010 has at least set the foundation for the rollout of key projects.

“There is emphasis on upgrading the country’s transportation system with projects including seven new highways, LRT extensions, MRT and southern double tracking worth a total of RM71 billion.

“A total of 52 public-private projects (PPP) worth RM62.7bn were also identified. There is also a RM20 billion fund established to facilitate private sector investments in projects with high strategic value and multiplier effects,” it said.

HDBSVR said the sector will ultimately be driven by newsflow, but it expects more emphasis on margin recovery to monitor execution risks.

The research house expects stronger margin recovery in 2HCY10, and normalising to 9-10% in FY11; IJM is a candidate with zero legacy jobs in its orderbook currently.

From January 2007 to September 2008 – about when 9MP projects were rolled out - the KL Construction Index traded up to 24 times price-to-earnings and 2.2 times price/net tangible asset (+2SD above mean) vs mean valuations now.

“And in anticipation of more aggressive rollout of high multiplier projects, the KL Construction Index has room to trade higher and possibly test 2007/2008 highs,” it said.

HDBSVR said its high conviction picks for the sector are Gamuda and MRCB – the two largest beneficiaries of the MRT project. Its recent initiation on MMC is also an alternative MRT proxy.

“We are also positive on Gamuda’s Vietnam project that is slated for maiden launch in October. Our other BUYs are IJM as the safest proxy to the sector given its diversified earnings base and strategy to bid for a large pool of contracts, while WCT remains the proxy most leveraged to the sector. Our small cap value pick is Sunway which is trading at only 10 times CY11 EPS and will post record FY10 earnings,” it said.

Source...

MRT for KL vital to boost efficiency, attractiveness to investors, says expert

Written by Melody Song, Friday, 20 August 2010 16:24

PETALING JAYA: Malaysia should consider putting in place a mass-rapid transit (MRT) system soon in view of the increasing population, rising CONSTRUCTION [] costs and to enhance its competitiveness in attracting foreign investors, said an official of Hong Kong's MTR Corp Ltd.

Its projects director Chew Tai Chong said an integrated transportation system as a backbone is needed to boost time and cost efficiency.

“Among one of the things foreign investors consider is a country’s core infrastructure. If their staff are taking too long to commute, it is counter-productive to their business,” he said recently. “This is part of the reason why Singapore continues to improve its MRT system.”

He also said that proposals served by key players locally could serve as a catalyst to move the project.

“A masterplan would be a step forward for Kuala Lumpur, but those involved need to remember that these plans should be reviewed and improved on a regular basis,” said Chew.

“At present, with three separate railway lines and only 18% public transport utilisation in KL, there are losses arising in terms of time and efficiency (for workers in the city centre) because of traffic congestion.”

He added there was little integration and interconnectivity between the lines and bus systems and that tolerable “walking time” for commuters to move between lines should be addressed.

On soil conditions in the city which could make drilling at certain depths challenging, Chew said there were always risks but new TECHNOLOGY [] would enable project engineers had methods to mitigate the risks.

“There is a window of opportunity in Malaysia at present (for a MRT system), given a reduction in government subsidies (for petrol), talks of environmental sustainability, and the increasing number of cars on the road,” he said. “If the project is delayed for too long, it could eventually be beyond the means of construction players to build.”

The proposal for a MRT was mooted in June this year by a joint-venture comprising of MMC Corp Bhd and GAMUDA BHD [].

The project is estimated to cost up to RM36 billion and stands to receive up to RM3.6 billion from an infrastructure allocation under the 10th Malaysia Plan (10MP).

Read source...

Gamuda BUY RM 3.35 Price Target : 12-month: RM 4.35 - DBS

• RM36bn MRT project, a key milestone catalyst easily doubling orderbook with another 10 years earnings visbility

• Excellent proxy to Vietnam's positive long term structural shift in property market with RM16bn GDV (12% of SOP)

• Resolution on Selangor State Water restructuring soon could see Gamuda reaping >RM600m in cash or RM0.28/share

Read more...

Gamuda Land sees 67pc earnings growth

Gamuda Bhd's property arm, Gamuda Land, is expected to record the strongest pre-tax earnings growth over the next two years at an compound annual growth rate of 67 per cent.

This is due to Gamuda's large scale ventures in Vietnam which would begin contributing to group profits in the 2011 financial year.

The projects in Vietnam have a combined gross development value of RM16 billion.

In addition, Gamuda Land has acquired a 1.17 hectare of freehold land in Jalan Pudu which would be turned into mixed commercial development wihin three years.

ECM Libra also said the project was Gamuda's first mixed commercial development in Malaysia and would contribute about RM90 million in after-tax earnings over the development period.

-- Bernama

CIMB issues first Callable Bull Certificates in Malaysia

CIMB Bank Bhd has issued the first four Callable Bull Certificates (CBLC) in the country, on AirAsia Bhd, Gamuda Bhd, Genting Bhd and Berjaya Corp Bhd.

The certificates, which were recently incorporated in Bursa Malaysia's listing requirements, will start trading today.

While Call Bear/Bull Certificates (CBBC) are an established form of investment in mature financial markets such as Hong Kong and in Europe, it is relatively unknown in Southeast Asia.

"CBBC is a new investment vehicle, which gives fresh option to the equities market and brings greater depth to the structured warrants market," Bursa Malaysia Bhd chief executive officer Datuk Yusli Mohamed Yusoff said at the launch of the certificates in Kuala Lumpur yesterday.

CIMB Bank plans to issue about four CBBCs a month progressively.

While CBLC bears similarities to call warrants, its main features are a Mandatory Call Event (MCE) and the fact that settlement is only done in cash.

A MCE is the issuers' right to call the CBBC, which leads to the suspension of the CBBC, should it reach the call price, prior to the expire date of the certificates.

For CBLCs, the call price is either at or above the exercise price of the underlying instrument.

If the call price or level is equal to the exercise price, investors will not receive any cash amount. If the call price/level is different from the exercise price, cash settlement will be done based on an established formula.

The call prices of AirAsia CBLC, Gamuda CBLC, Genting CLBC and BCorp CBLC are RM1.05, RM2.70, RM6.15 and RM1.06.

More than 50 per cent of the total structured warrants currently listed on Bursa Malaysia are issued by CIMB Bank.

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Maybank IB Research keeps Malaysian construction plays at Overweight

Maybank IB Research keeps Malaysian construction plays at Overweight as house thinks there's more than 50% chance government will give green light for MYR36 billion ($11.25 billion) Klang Valley MRT project in August. Analyst Wong Chew Hann says proponents of the plan Gamuda (5398.KU), MMC Corp (2194.KU) may have addressed major concerns with half of planned construction cost to be financed via serial bond issued by firms; other MYR18 billion will be via public funds, MYR2 billion/year "manageable" for government's coffers. Wong says Gamuda, MMC Corp will be biggest beneficiaries, but jobs will filter down entire construction chain (physical works likely to be tendered out), including building material players; earliest start to project likely in 2H11. Gamuda shares last down 0.9% at MYR3.33, MMC Corp +1.7% at MYR2.45.

Blocking eh... Why aah??

Gamuda