Mudajaya Inches Up 3% On Power Venture In Myanmar
Mudajaya Group rose as much as 3 percent among top gainers on Thursday morning following its announcement to pursue power plant projects in Myanmar. The stock climbed as much as eight sen to RM2.76 earlier and was the sixth-largest advancer across Bursa Malaysia. Analysts commented that Mudajaya’s decision to venture into Myanmar was a sound decision as electricity coverage in the country is merely 13 percent based on World Bank reports. Nonetheless, country risk remains a significant issue with regards to the government’s willingness to honour its contracts, according to Alliance Research analyst Jeremy Goh. The research house is maintaining its “buy” call and fair value of RM3.78 for Mudajaya shares according to Goh. Mudajaya told the exchange on Wednesday that its wholly-owned subsidiary Mudajaya Corp has signed a memorandum of understanding (MOU) with the Myanmar government and Malaysian Koon Yew Yin to establish power plants in the neighbouring country.
Significance: Under the MOU which is valid for a year, the parties intend to set up coal-fired and solar-powered independent power plants within the Mandalay region and other suitable areas. As such, Mudajaya and Koon plans to set up a joint-venture company on a 70-30 basis.
Palm Oil Declines On Slowing Exports & High Stocks
Malaysian palm oil futures fell on Thursday, weighed by dwindling exports and consistent high stocks. Exports of Malaysian palm oil products for 1st to 10 of January tumbled 25 percent to 373,462 tonnes from a revised 499,732 tonnes shipped during Dec 1-10, cargo surveyor Intertek Testing Services said on Thursday. The fall came despite Malaysia’s zero export tax that was expected to boost crude palm oil shipments amid stricter Chinese regulations on edible oil imports which had possibly deterred some exporters. Nonetheless, it is expected to have a positive impact on the longer term, according to a trader with a foreign commodities brokerage. Total traded volume stood at 19,678 lots of 25 tonnes each, higher than the usual 12,500 lots. According to market analyst Wang Tao, palm oil prices are expected to rebound to RM2,453 from the a temporary bottom of RM2,382 based on technical analysis.
Significance: Palm oil may likely face further pressure as data released by the Malaysian Palm Oil Board showed inventory grew 2.4 percent from the previous month to a new record of 2.63 million tonnes. The data went against market expectations that stocks likely dropped 2.5 percent to 2.5 million tonnes.
HSL Secures RM48.7mil Project In Samalaju
Hock Seng Lee (HSL), a Sarawak-based infrastructure specialist won an contract worth RM48.9 million in Samalaju Industrial Park, Bintulu Division; Sarawak. The scope of the project includes site clearing, substantial earthworks, drainage, pavement works and related external works for a major road of around five kilometre distance that will serve the expanding industrial park. Managing director Dato Paul Yu Cheep Hoe said many multinational metal producers have established facilities in Samalaju, and hence essential infrastructure provision and access routes are vital to maintain the exciting momentum of the Sarawak Corridor of Renewable Energy (SCORE) as the driver of Sarawak’s growth story. The site handing over is slated for the end of January this year with a contract period of 18 months. In the meantime, the company has approximately RM1.9 billion worth of projects in hand with RM1.05 billion outstanding. Earlier this week, HSL submitted another tender bid for drainage diversion works in Samalaju and several packages for infrastructure works related to the Halal Hub in Tanjung Manis, as well as roadworks in Mukah, Yu added.
Significance: HSL is of the opinion that its skill set, experience and cost-competitiveness would enable the company to stand a better chance when bidding for and undertaking SCORE-related projects. The company also expects more contracts from this dynamic region of the state.