KUALA LUMPUR: Shares of Ekovest Bhd and Iskandar Waterfront City (IWC) rallied in early trade Monday following the announcement of the revival of Bandar Malaysia project last Friday.
IWC hits limit-up, gaining 29.41%, or 30 sen to RM1.32, its highest since March 2018. It is the second top gainer on Bursa Malaysia with 13.7 million shares traded.
Ekovest jumped 39.55%, or 26.5 sen to 93.5 sen with 94 million shares traded. Ekovest-WB surged 136.11%, or 24.5 sen to 42.5 sen with over 64 million shares traded.
Construction and building materials counters are also dominating the gainers’ list on Bursa Malaysia. Tasek advanced 29 sen to RM5.44, Gamuda rose 20 sen to RM3.28, Lafarge Malaysia gained 17 sen to RM2.50 while Econpile added 13 sen to 71.5 sen.
Last Friday, the Prime Minister’s Office (PMO) announced that the government has decided to reinstate the Bandar Malaysia project.
The 483-acre Bandar Malaysia project (located on the site of the former Sungai Besi Air Force base) is estimated to generate RM140bil in gross development value (GDV) while attracting foreign direct investments.
The Prime Minister said the original contractors, which is a consortium consisting of Iskandar Waterfront Holdings Bhd and China Railway Engineering Corp Sdn Bhd (IWH-CREC), have 60 days to pay the original deposit sum of RM741mil with an additional RM500mil.
In December 2015, the Finance Ministry sold off a 60% stake in Bandar Malaysia to a consortium consisting of Iskandar Waterfront Holdings Bhd and China Railway Engineering Corp Sdn Bhd to be the project's master developer.
In May 2017, however, the government called off the deal to sell the stake to the consortium over the failure of purchasing parties to fulfil payment obligations.
PublicInvest Research said the revival of Bandar Malaysia project came in as a positive surprise as it was being announced just a few days after the ECRL project.
It noted that the project was subsequently retendered after the termination, though the process had been somewhat quiet after rounds of bids.
In July last year, the ministry’s officials disclosed that there were “zero” developers who had expressed interest in the project.
“Reinstatement of this project is an obvious shot-in-the-arm, particularly to the local construction sector.
“Given the greenfield nature of this project, players exposed to the initial infrastructure-based phases (access roads, earthworks, water and sewerage treatment plants, substantial piling works) could be sizeable opportunities,” PublicInvest said.
“Within our universe, big names like Gamuda, IJM Corporation and WCT Holdings could be beneficiaries for the construction works.
“Specialist contractors such as Advancecon Holdings for earthworks, Econpile Holdings and Pintaras Jaya for piling, Lafarge Cement and Tasek Corporation could also be beneficiaries,” it added.