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Tuesday, June 3, 2008

Putrajaya Perdana wins RM113mil job

KUALA LUMPUR: Putrajaya Perdana Bhd has won a contract worth RM113.69mil from BR Property Holdings Sdn Bhd for a project to extend an existing office and shopping complex in Jalan Maarof in Taman Bukit Bandaraya here.

The project, which is due for completion by Sept 2, 2009, is expected to contribute positively to the earnings and net assets of the group for the financial year ended Dec 31, 2008 and Dec 31, 2009,'' Putrajaya Perdana said in a filing with Bursa Malaysia yesterday.

In a separate filing Crest Builder Holdings Bhd said it had bagged a RM165.9mil job awarded by Panareno Sdn Bhd to construct a serviced apartment in Bukit Damansara, Kuala Lumpur.

It said the contract period was 25 months from the date of site possession, expected to be in the second half of this year.

By The Star

Gamuda shares rebound to close 5 sen higher

PETALING JAYA: Gamuda Bhd shares staged a rebound from last Friday's 18% decline to close 5 sen higher at RM2.50 yesterday after several analysts said the company's exposure to the Vietnam property market was overblown.

The company, through Gamuda Land Sdn Bhd, is developing the RM8bil Yen So Park, comprising a mix of residential and commercial properties on 808 acres in return for constructing a sewage treatment plant and other infrastructure works.

The stock saw 17 “buy” recommendations compared with four “holds” and three “sells”, according to Bloomberg data.

CIMB Research, which has maintained an “outperform” on the stock, said in a report that based on its current worst-case scenario where the RM3.9bil value of the Yen So Park land was stripped out and assuming zero contributions from the double-tracking project to construction profits as well as a lower construction price-to-earnings of eight times instead of 13.5 times, the revised net asset value (RNAV) would drop to RM2.78 based on a higher 30% discount to RNAV instead of 20%.

Analyst Sharizan Rosely said net earnings forecast for the next two financial years would drop by 26% to 30% if Vietnam contributions were removed.

“In view of the cautious economic environment in Vietnam, we're now cutting our revenue forecasts for Yen So,” he said, adding that revenue would be cut for the next two financial years to RM250mil from RM800mil and RM400mil from RM800mil. Gamuda's financial year ends July 31.

Sharizan said this would see earnings forecasts cut by 17% to 20% for the next two financial years.

“Although the conditions of Vietnam's economy are a concern of late, we think it is more worrying for property developers that have planned new launches in the next nine to 12 months,” he said.

Sharizan added that cost inflation and higher borrowing costs had dented affordability and demand over the past six months based on the guided 10% drop in property prices.

“However, we take comfort in knowing that it will take at least 12 months before Gamuda starts selling the commercial and residential units in the market,” he said.

Meanwhile, the share prices of two other developers exposed to the Vietnam property market, SP Setia Bhd and Berjaya Land Bhd, were down 20 sen and 24 sen, to RM3.94 and RM4.86, respectively.

By The Star (by Fintan Ng)

Ceiling prices of cement to be lifted on Thursday

KUALA LUMPUR: The government yesterday announced the liberalisation of cement pricing, with the abolition of ceiling prices for the local market effective Thursday, with the hope that it would boost the cement industry in the country.

It also set new conditions for the import of cement, imposing a 10% import duty and exempting cement importers from Sabah and Sarawak from applying for import licences, Prime Minister Datuk Seri Abdullah Ahmad Badawi said in a statement.

Normal Portland cement (HS2523 29 900) and hydraulic cement (HS2523 90 0000) will be affected by this ruling.

Abdullah was quoted by Bernama as saying that this was in line with the government’s efforts to ensure that the country’s development would progress smoothly and to have a more efficient and transparent cement industry.

In an immediate response, Master Builders Association of Malaysia (MBAM) president Patrick Wong told The Edge Financial Daily that this was bad news for its members, as it would result in local cement manufacturers raising cement prices. The 10% import duty would cause hardship to the building industry and would prompt builders to seek alternative sources of cheaper cement.

Some economists, however, welcomed the news. “Construction players can have access to cheaper sources of the building material worldwide. They can pass down the lower cost to consumers through lower prices of homes and buildings,” Bank Islam Malaysia Bhd senior economist Azrul Azwar told The Edge Financial Daily.

Share prices of cement manufacturers in Malaysia fell yesterday following the announcement. Cement Industries of Malaysia Bhd dropped the most, by 3.3% or 20 sen to end at RM5.80, followed by Lafarge Malayan Cement Bhd, which shed 1.4% or six sen to RM4.34. YTL Cement Bhd dipped 0.8% or four sen to RM4.70.

By The EDGE Malaysia (by Tony C.H.Goh)