30.11.2009 local business news

Malaysian construction companies unlikely to be hit by Dubai’s debt crisis. Master Builders Association Malaysia (MBAM) president Ng Kee Leen said most of Malaysian construction companies had either pulled out or were at the tail-end of completing their construction projects there. IJM Corp Bhd (IJM MK, Hold, TP: RM4.60) CEO Datuk Krishnan Tan said the company had already completed the bulk of its projects in Dubai. Gamuda Bhd (GAM MK, Buy, TP: RM3.96) official said the company was not significantly exposed to the fallout in the Dubai construction sector. The Iskandar growth region is also not affected by the Dubai crisis. Johor MB Datuk Abdul Ghani Othman said this was because only one company from Dubai, Damac Properties, had invested in a real estate sector in IDR – namely a property project on a 8ha site. (Starbiz)

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Malakoff Corp Bhd, a unit of MMC Corp Bhd, is exploring the possibility of acquiring a substantial stake in the 1,400MW Jimah power plant and the company undertaking its operations and maintenance works. “It is carrying out due diligence on Jimah O&M Sdn Bhd and Jimah Teknik Sdn Bhd and will decide if these are feasible investments,” says a source. “The due diligence, which is expected to be concluded next month, will be on the financial affairs of both companies and include an assessment of the quality of their earnings as well as their cash flow and liabilities,” adds the source. (The Edge)

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DRB-Hicom Bhd is facing problems with Suzuki Motor Corp on its assembly, distributorship and import agreements for Suzuki vehicles in Malaysia, sources say. It is learnt that officials of Japan-based Suzuki Motor are unhappy with the way DRB-Hicom is running the Suzuki business in Malaysia and could look into terminating the agreements in the worst-case scenario. Suzuki Motor’s chief complaints are that DRB-Hicom has not developed and promoted the brand enough or built up the Suzuki network. (The Edge)

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Scomi Group Bhd’s oilfield services business under Scomi Oiltools was awarded a RM17.5m contract to supply specialty drilling fluid chemicals to clients in Malaysia. The contract is for a duration of two years. Scomi said the contract was awarded in August 2009 and to date Scomi Oiltools has started to supply the said product. Scomi Oiltools will supply the product from its plant at the supply base in Peninsular Malaysia. Scomi Oiltools also supplies the product to clients in Sudan, Turkmenistan, Indonesia, Venezuela, Thailand and India. (Financial Daily)

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Bina Puri in talks on RM200m Kota Kinabalu waterfront mall, condo project. Bina Puri Construction Sdn Bhd (BPCSB) MD Datuk Henry Tee Hock Hin said his firm is negotiating with Waterfront Urban Development (WUD) Sdn Bhd to construct a retail mall and condominium at the Kota Kinabalu City Waterfront (KKCW) in Sabah. KKCW is a RM500m JV between WUD and Kota Kinabalu City Hall, and is expected to be completed by 1Q 2011. BPCSB has an existing contract with WUD worth RM30m to lay the foundation for phase one of the development. The firm is also bidding for another contract to build a mall for around RM100m in Kuching, Sarawak. BPCSB already has a contract worth RM60m from the client to lay the foundation of the mall. (BT)

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Penang state government has given the nod to two local companies to build separate monorail test tracks on the mainland. Deputy Chief Minister II Prof P Ramasamy said that the state government has agreed to allow both companies to each build the one-kilometre test tracks, which would be located either in Batu Kawan or Nibong Tebal. Ramasamy said there was no tender called for the project but the two companies had on their own submitted proposals to undertake the project. However, he declined to reveal the names of the companies or other details of the agreement which he said would be unveiled in due course when things firmed up. He also said the state was not forking out any money but only allowing the companies to
build the test track on state land. (Financial Daily)

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Iskandar Malaysia in Johor has attracted RM9bn of new investments this year, exceeding the full year target of RM3bn. Iskandar Regional Development Authority (IRDA) CEO Harun Johari said the bulk of the RM9bn came from local investors and invested in property. Iskandar has drawn RM50.5bn in cumulative investments as at October this yea, more than the RM44.76bn it targeted for the full year. 35% of the RM50.5bn has already been spent on actual work on the ground, said Harun. Although Damac Group, a Dubai property developer, has pulled out of a deal to buy land from UEM Holdings Bhd for RM396.4m, Iskandar has found a “replacement” in the form of a South Korean investor. (BT)

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Enough time for GST implementation. Second Finance Minister Datuk Seri Ahmad Husni said the GST would replace the sales and service tax (SST), and would be implemented 18 months after the second reading of the GST Bill next March. The bill would be introduced in the current sitting of Parliament, ending Dec 15. The Government planned to introduce the GST at 4%, but selected essentials such as rice, sugar, cooking oil, flour and domestic transportation would be exempted. (Starbiz)

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Central Bank of Malaysia Act 2009 repeals the Central Bank of Malaysia Act 1958 to strengthen Malaysia’s resilience to financial crises in a globalised environment. The new Act provides comprehensive provisions to ensure swift and orderly resolution in the event of an imminent financial crisis to reduce its impact and costs to the domestic economy and to sustain public confidence. The Act says, “Provisions have been made for heightened surveillance, pre-emptive actions and resolution powers including the extension of liquidity assistance to entities not regulated by the central bank but which pose risks to overall financial stability.” The exercise of powers for purposes of achieving financial stability shall be decided by the Financial Stability Executive Committee (FSEC). Meanwhile monetary policies would be formulated and implemented by a Monetary Policy Committee (MPC); both committees will be established under the Act. (Starbiz)