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Friday, June 19, 2009

IJM shares up on Mideast delight

IJM Corp, Malaysia’s second biggest construction company, rose for the first time in seven days after OSK Research Sdn Bhd raised the stock rating on the builder’s RM303 million (US$86 million) Abu Dhabi project.

The shares added 1.8 per cent to RM5.55 at midday break, bound for the largest increase since June 10.

The “Middle Eastern delight” led Jeremy Goh, an analyst at OSK Research, to upgrade IJM to “trading buy” from “neutral” and raised the stock’s target price to 6.10 ringgit from 6.0 ringgit.

Petaling Jaya, Malaysia-based IJM said yesterday a joint venture owned by the company and LFE Corp won the contract to build a hotel in Abu Dhabi from Tamouh Investments LLC. The project is expected to be completed by the end of February next year, IJM said.

“We expect subsequent awards to flow over the coming months” following this contract, said Goh, who also raised his forecast for IJM’s 2010 and 2011 profits to RM318.9 million and RM353 million, respectively, on the expectation that the builder will secure more projects worth about RM1.7 billion by the end of the year.

“This amount is expected to include two contracts that could be substantial in value,” Goh said. He also expects IJM to participate in the Light Rail Transit extension project in Kuala Lumpur.

By Bloomberg

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