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.

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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.

Economic Transformation Programme: Roadmap to high-income nation

Written by Chan Kok Leong Wednesday, 22 September 2010 15:40

KUALA LUMPUR: The government has announced the Economic Transformation Programme (ETP) to realise Malaysia’s ambition to turn the country into a high-income economy by 2020.

Minister in the Prime Minister’s Department, Senator Datuk Seri Idris Jala told a hall packed with some 3,000-odd corporate figures and business leaders yesterday that the ETP will help Malaysia triple its Gross National Income (GNI) from RM660 billion (2009) to RM1.7 trillion in 2020.

This translates to an increase of GNI per capita income from RM20,770 (US$6,700) to at least RM46,500 (US$15,000), meeting the World Bank’s high-income benchmark. To help achieve this, the government aims to sustain 6% GNI growth between 2011 and 2020.

On top of that grand aspiration, the government is confident that the private sector will be the primary driver for the push towards a high-income nation.

A total funding of over RM1.4 trillion is required for the duration of this economic push, with 92% of the funding expected to come from domestic investments and public funding expected to take up the remainder.

In his presentation, non government-linked companies (GLCs) are expected to fund 60% or RM824 billion with GLCs funding 32% or RM446 billion. Public spending is estimated to be around RM105 billion.

According to Idris, the targeted 60% private sector funding will be a significant increase from 37% in 2008, and is consistent with the 12.8% per annum private investment growth noted in the 10th Malaysia Plan.

During his hour-long presentation, it was noted that the total private investment from 2005 to 2010 was RM410 billion or an average of RM68 billion per annum.

“Malaysia needs to increase this average annual private investment level in the next 10 years by about 60% more than historical average to around RM120 billion per annum for 2011-2020,” said Idris.

Private investment-led growth will cut government funding, which is constrained by the need to improve the nation’s fiscal position, said Idris.

“As such, government funding will be targeted at initiatives that will maximise GNI impact for every ringgit of public money spent, with heavier emphasis on development expenditure over operational expenditure,” said the former Malaysian Airlines Bhd CEO.

“Malaysia has no time to lose. We need a complete, radical economic transformation. The days of depending on traditional growth engines are over. If we continue on the current model, we risk getting stuck in middle-income trap and lose out on talents necessary to support a high-income economy,” he added.

This article appeared in The Edge Financial Daily, September 22, 2010.