Ambank Issues Eight New Call Warrants

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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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JAKS-IJM JV accepts RM268.5m Pahang-Selangor raw water transfer project

Written by Joseph Chin Thursday, 02 December 2010 18:41

KUALA LUMPUR: JAKS Resources Bhd and its joint venture partner IJM CORPORATION BHD [] have accepted the award for the RM268.53 million Pahang-Selangor raw water transfer project.

JAKS said on Thursday, Dec 2 its unit JAKS Sdn Bhd and IJM CONSTRUCTION [] Sdn Bhd had signed and accepted the letter of acceptance from the Ministry of Energy, Green TECHNOLOGY [] and Water.

The completion date of the project is May 30, 2014.

Taken from here...

IJM JV secures RM690m contract for National Cancer Institute

Written by Joseph Chin Tuesday, 09 November 2010 19:50

KUALA LUMPUR: The Kiara Teratai-IJM joint venture has accepted a contract to design, build and equip the National Cancer Institute for a contract sum of RM690 million.
IJM Corp said on Tuesday, Nov 9 the contract was awarded by Kiara Teratai Sdn Bhd, which has a 60% stake in JV and IJM CONSTRUCTION [] Sdn Bhd 40%.

The project involves the construction of a hospital block and the completion date of the project is Aug 31, 2013.

Taken from here...

15 firms attend SPNB tender briefing for LRT job

STATE-owned public transport operator Syarikat Prasarana Negara Bhd (SPNB) had called for a tender briefing yesterday for the light rail transit (LRT) line extension in the Klang Valley.

It is understood the briefing was attended by 15 construction companies to discuss the scope of works involved in the LRT extension project estimated at about RM9 billion.

SPNB invited the companies.

They include Sunway Construction Sdn Bhd, IJM Construction Sdn Bhd, Muhibbah Engineering Sdn Bhd, Gamuda Bhd, Bina Puri Holdings Bhd, Loh & Loh Corp Bhd, MRCB Engineering Sdn Bhd as well as joint-ventures such as WCT-Sinohydro, Ranhill-CCCC and UEM Builders-Intria Bina.

It is understood that the companies are expected to visit the site this Sunday, where the lines between Ampang and Kelana Jaya are to be built.

"The companies must buy the tender documents for the project by June 24. SPNB may call for tenders for infrastructure works first," a source told Business Times.

It is learnt that there will be a total of eight packages under the project, which will be tendered in stages.

These include the construction and completion of facilities work for the Ampang LRT line, and the Kelana Jaya LRT line.

The other packages are to nominate sub-contractors for fabrication and delivery of segmental box girders for both the Ampang and Kelana Jaya LRT lines.

SPNB group managing director Datuk Idrose Mohamed had recently said that 15 candidates were shortlisted for the sub-contracting of fabrication and delivery of segmental box girder works.

SPNB is raising RM4 billion from bond sales to part-finance the project, which forms part of the RM10 billion railway scheme to expand Kuala Lumpur's public transport network.

Source ...

SunCon, WCT, Fajar, Muhibbbah pre-qualified as main contractors for LRT extensions

Written by Joseph Chin Wednesday, 28 April 2010 11:35

KUALA LUMPUR: Syarikat Prasarana Negara says 17 applicants have been pre-qualified as main contractors for the extensions to the light rail transits for the Ampang and Kelana Jaya lines.

It said on Wednesday, April 28 the applicants have demonstrated their technical and financial capacity and capability with the relevant infrastructure works experience.

They are:
1.Sunway CONSTRUCTION [] Sdn Bhd
2.Fajarbaru Builder Sdn Bhd – Signatium Construction Sdn Bhd JV
3.WCT – Sinohydro JV
4.IJM Construction Sdn Bhd
5.Ranhill – CCCC JV
6.Muhibbah Engineering Sdn Bhd
7.Gamuda Berhad
8.UEM BUILDERS BHD [] – Intria Bina Sdn Bhd JV
9.MMC- Zelan JV
10.MRCB Engineering Sdn. Bhd
11.Trans Resources Corporation Sdn Bhd
12.BPHB – Tim Sekata JV
13.Zabima – Leighton JV
14.Mudajaya Corporation Berhad
15.MTDC – Persys JV
16.Loh & Loh Constructions Sdn Bhd
17.Ahmad Zaki Sdn Bhd

In addition, 15 applicants have been pre-qualified as nominated sub-contractors for the fabrication and delivery of segmental box girder. The successful contractors will be notified officially in due course by Prasarana. The 15 are:

1.Sunway Construction Sdn Bhd
2.Fajarbaru Builder Sdn Bhd – Signatium Construction Sdn Bhd JV
3.WCT – Sinohydro JV
4.IJM Construction Sdn Bhd
5.Ranhill – CCCC JV
6.Muhibbah Engineering Sdn Bhd
7.UEM Builders Bhd – Intria Bina Sdn Bhd JV
8.MMC- Zelan JV
9.MRCB Engineering Sdn. Bhd
10.BPHB – Tim Sekata JV
11.Zabima – Leighton JV
12.MTDC – Persys JV
13.Ahmad Zaki Sdn Bhd
14.Bina Puri – Acre Works – SNC Lavalin JV
15.UEM Construction Sdn Bhd – Projek Penyelenggaraan Lebuhraya Berhad (PROPEL) JV

The financing of the project will be from Islamic bonds guaranteed by the Government. In September 2009, Prasarana had successfully launched RM4.0 billion Sukuk programme of which RM2.0 billion had been raised and oversubscribed by 5.3 times for the 15-year and 2.7 times for the 20-year tranche to part finance the line extension project. The balance of RM2.0 billion will be raised as the project implementation progresses.

Construction Sector: Overweight

AMRESEARCH maintains an "overweight" stance on the construction sector after IJM Corp Bhd bagged two contracts worth a combined RM247 million in Sarawak this week.

The stockbroker likes IJM, Gamuda, WCT, Naim Holdings Bhd and Hock Seng Lee in the sector.

"We expect a re-acceleration of contract awards ahead of the unveiling of the 10th Malaysia Plan in June," AmResearch said in a report yesterday.

"This will be further lifted by a recovery in construction margins and gradual revitalisation of order flows abroad - notably in India, the Middle East and Vietnam."

"We understand that the Murum Dam access road project consists of five main packages worth between RM700 million and RM800 million. Access roads are crucial to improve connectivity to the RM3 billion Murum Hydroelectric Dam - constructed by China's Three Gorges Project Corp Ltd."

"Award of first two packages to IJM will likely prod rollout of the project's three remaining packages worth an estimated RM500 million-RM600mil soon. Our channel checks indicate that Hock Seng Lee appears to be a frontrunner for at least two of three packages - given their solid track record as an infrastructure/land reclamation specialist in Sarawak."

"Latest development validates our growing conviction of intensifying contract flows from Sarawak, ahead of its state elections. Award of the work packages for the Murum Dam access roads to IJM follows a Business Times report earlier this week that up to eight contractors had been shortlisted for upgrading Sibu Airport."

IJM unit bags two contracts worth RM247mil

KUALA LUMPUR: IJM Construction Sdn Bhd, a wholly-owned unit of IJM Corp Bhd, has bagged two contracts worth RM246.7mil.

IJM Construction got both orders from the Sarawak Public Works Department (JKR), to build two access roads in Kapit, IJM Corp told the stock exchange.

The first package of works involves earthworks, the construction of three minor bridges, culverts, drains and pavement works for 20km of road for RM125.2mil.

The second job, worth RM121.5mil, requires earthworks, rock excavation, the construction of two minor bridges, culverts, drains and pavement works for 10.5km of road.

The construction period for both packages is 24 months, according to IJM Corp.

Putrajaya to call for project tenders worth RM1b

Companies like Ahmad Zaki Resources, IJM Corp, Sunway Holdings, UEM Group and Ireka Corp are set to bid for tenders to build office towers, residential properties and office blocks.

Putrajaya Holdings Sdn Bhd will call for tenders for projects worth over RM1 billion this year as it is bullish on the property market in Putrajaya.

Chief executive officer Datuk Azlan Abdul Karim said the tenders are to build four office towers worth a combined RM700 million, residential properties and office blocks.

Tenders for the 14- and 15-storey office towers with one million sq ft of built-up space will be called in the next five months.

Companies like Ahmad Zaki Resources Bhd (AZRB), IJM Corp Bhd, Sunway Holdings Bhd, UEM Group and Ireka Corp Bhd are set to bid.

"When you have the government as the anchor tenant here, there are always spin-offs. There is support from the private sector and government agencies," Azlan said.

"We will lease the four office towers first and sell later. We have prospective buyers," he told Business Times after the signing of an agreement between Putrajaya Holdings and AZRB's construction arm, Ahmad Zaki Sdn Bhd (AZSB), in Putrajaya yesterday.

As Putrajaya is due for a cybercity status, more multinational companies (MNC) are expected to step in.

"The government wants Putrajaya to be a green city. This will attract more MNCs and local private sector companies as well as foreign firms.

"But for Putrajaya to go green, we need a monorail. I hope the government will have a budget to build a monorail under the 10th Malaysia Plan. That will help boost activities in Putrajaya," Azlan said.

According to Azlan, Perbadanan Putrajaya, the city's local authority, has sent in a request to the government. The matter is still pending.

On the signing with AZSB, Azlan said it will build a waterfront commercial project fronting the Putrajaya lake for RM126 million over the next two years.

AZSB will construct three blocks of three- and five-storey buildings comprising 106 units of retail lots and shop offices.

Azlan said the average selling price per unit is around RM500 per sq ft and more than half have been booked.

Stocks to watch: Hai-O, Sunway Holdings, IJM, semicon

KUALA LUMPUR: Stocks on Bursa Malaysia are expected to start off on a cautious note on Monday, March 22 after the FBM KLCI was unable to hold on to the key 1,300 level over the past week while trading volume has shrunk.

Concerns among investors would be the rising inflationary trend after the consumer price index for February showed a 1.2% increase on-year while it was unchanged from January.

However, over the longer term, Nomura Securities Research is positive about the outlook for Malaysia, as it sees the economy rebounding and still sees upside to the current earnings upgrade cycle.

On Wall Street, stocks slipped, weighed down by energy shares as crude oil prices tumbled under pressure from a rising U.S. dollar.

Renewed worries about Greece's debt problems sent the euro to a more than two-week low against the greenback and pressured oil and other commodity prices, according to Reuters.

The Dow Jones industrial average dropped 26.60 points, or 0.25 percent, to 10,752.57. The Standard & Poor's 500 Index fell 4.78 points, or 0.41 percent, to 1,161.05. The Nasdaq Composite Index lost 15.13 points, or 0.63 percent, to 2,376.15.

Meanwhile, Nomura Securities Research, in a recent report, said after contracting 2.1% in 2009, Malaysia’s real GDP growth is expected to rebound to 5.5% in 2010 and level off to 5.2% in 2011.

A strong 4Q recovery of up 4.5% year-on-year saw Bank Negara Malaysia raising its rates by 25bps on March in its Monetary Policy Committee meeting.

“The latest move by the central bank supports our view that the recovery is firmly on track,” it said.

In its research note, it said the most common feedback about Malaysia is that the market is not cheap. Owing to the huge accumulated current account surpluses and the large pool of liquidity that’s largely trapped in the system, the market will remain expensive, in its view.

“We remain positive on the market supported by a favourable earnings revision cycle. Consensus started to turn positive in May 2009. After the 1997-98 crisis, the earnings upgrade cycle lasted about 18 months. The earnings upgrades post the 2001 tech-led recession went on for 13 months. Judging from the previous upgrade cycles, we still see upside to the current earnings upgrade cycle.

“This is it! From a positive macro-economic recovery story to earnings upgrade cycles at the company level, all factors are pointing to a favourable outlook for the Malaysian stock market. Additional catalysts could come from positive surprises in the soon-to-be announced New Economic Model. We are overweighting the banks, contractors, media and the healthcare sectors. However, we continue to underweight the planters,” it said.

Stocks to watch are IJM Corp Bhd, HAI-O ENTERPRISE BHD [], SUNWAY HOLDINGS BHD [] and semiconductor-related counters including MPI and Unisem.

IJM Corp Bhd's unit Road Builder (M) Sdn Bhd has secured an RM600 million project to expand the Sungai Besi highway. It accepted the letter of award from Besraya (M) Sdn Bhd for the project on a fixed price lump sum of RM600 million. The CONSTRUCTION [] period is 36 months. Besraya is also a unit of IJM Corp.

Hai-O’s net profit rose 46% to RM18 million for the third quarter ended Jan 31, 2010 from RM12 million a year ago as it earnings were boosted by its multilevel marketing (MLM) division and higher group rental income. Hai-O plans more advertising and promotion activities such as incentive trip sales campaign and to recruit new members. The thrust for the company will be the wholesale and retail divisions, which will focus on health awareness campaign to a wider range of consumers. On the cards are the plan for its retail division to open more outlets across Malaysia especially in Sabah and Sarawak while it also focuses on developing more of its house brand products.

Sunway Holdings expects record profits in fiscal 2010 as it plans to tender for jobs worth up to 16 billion ringgit (US$4.84 billion) globally. It expects its construction orderbook to grow by one-third to RM4 billion this year, partly boosted by the government's roll-out of public sector contracts.

North America-based manufacturers of semiconductor equipment recorded orders totalling US$1.23 billion in February 2010, based on a three-month average basis. The Semiconductor Equipment Industry reported on Friday, March 19 the book-to-bill ratio was 1.22, based on its February 2010 Book-to-Bill Report. A book-to-bill of 1.22 means that US$122 worth of orders was received for every US$100 of product billed for the month.

Text written by Joseph Chin
Saturday, 20 March 2010 11:42

Buyouts bubbling, focus on tech stocks, glovemakers

Investors may look for more privatisation targets this week, semiconductor stocks could extend gains, while shares of rubber glove makers may continue sliding as investors temper optimism over their prospects.

Last week, Hume Industries (Malaysia) Bhd (3328), a maker of concrete products, and MBF Holdings Bhd, a trader and credit card issuer, received buyout offers from their owners.

On January 14, Tan Sri Quek Leng Chan made an offer to buy the rest of Hume for RM4.30 a share, a 7.5 per cent premium over the price before the offer was made.

This bolstered Hume shares as they crept up 2.4 per cent to RM4.25 the next day.

On January 11, Tan Sri Dr Ninian Mogan Lourdenadin offered 65 sen apiece to buy the rest of MBF Holdings. The stock closed 0.8 per cent up at 62 sen on Friday.

However, dealers said both offers may draw resistance from minority shareholders.

"The offers appear to be a bit low. They may have to revise if the take-up is not good," said a dealer, who declined to be named.

At RM4.30, Quek's offer for Hume is below the group's net assets per share of RM5.04 as at September 30 2009.

MBF's net assets per share, 95 sen at end-September 2009, is also higher than the offer price of 65 sen.

Semiconductor stocks may continue their rise this week as investors bet that they may benefit from recovering global demand for computers, mobile phones and liquid crystal display televisions.

Intel, the world's biggest chipmaker, forecast higher first quarter revenue than analysts estimated as demand for notebook computers rebounded. Its fourth quarter net income increased more than ninefold to US$2.28 billion (RM7.6 billion), the company said in a statement.

RHB Research expects a stronger recovery for the semiconductor sector this year, backed by a stronger outlook for key product segments, it said in a report on Friday.

Chipmaker Malaysian Pacific Industries Bhd gained 7 per cent on Friday, extending a 40 per cent rise for the year so far. Unisem Bhd also rose, adding 6 per cent to close at RM2.49 on Friday.

Stocks of rubber glove makers may be in for a bumpy ride this week after their recent surges led to concern that they were getting expensive.

They tumbled on Friday, giving up some of their gains after a sizzling run as analysts think the stocks are still cheap relative to their future earnings.

Industry leader Top Glove Corp Bhd fell 3.1 per cent to close at RM11.38 on Friday, while second-ranked Supermax Corp Bhd shed 8 per cent to end at RM5.56.

Investors may also focus on Malaysia Airlines (MAS) this week as its engineering unit is set to announce a deal to do maintenance work for India's SpiceJet.

MAS did not provide details, but a signing ceremony is due to be held today. MAS shares closed at RM2.96 on Friday.

Shares of builder IJM Corp Bhd may continue benefiting from an upgrade by UBS last week.

The research house now rates the stock a "buy" from "neutral" before.

IJM gained 2 per cent to close at RM4.70 on Friday.