LBI Capital to launch RM190m projects

PROPERTY developer LBI Capital Bhd plans to launch three projects in the Klang Valley with a total gross development value (GDV) of RM190 million this year.

Its executive director, Kong Sau Kian, said the projects comprised bungalows in Petaling Jaya at RM60 million, industrial lots in Puchong at RM100 million and service apartments in Subang Jaya at RM30 million.

"We are in the midst of getting the necessary approvals from the authorities," he told reporters after the company's annual general meeting in Shah Alam today.

Kong said LBI Capital would continue looking for other projects to maintain a healthy revenue amid the weak economic environment.

"This is expected to be challenging year as the sharp increase in the cost of building materials last year will continue to affect profit margin," he said, adding that other major component costs such as steel remained high and continued to affect the property business.

However, the favourable low interest rate and incentives offered by the government will help the industry to mitigate the adverse impact of the current downturn, according to him.

LBI Capital posted a lower pre-tax of profit RM1.767 million in its first quarter ended March 31, 2009, compared with RM2.064 million in the same quarter last year. Its revenue declined to RM19.017 million from RM19.613 million previously.

The company is now developing four residential projects, with three of them scheduled to be completed by year-end.

On the company's rubber manufacturing division, Kong said the business remained tough as margins continued to be pressured by the rising cost of raw materials and intense price competition.

The division is contributing about five per cent of the company's revenue, he said.

By Bernama

Magna Prima to launch RM700m projects in 2nd half

PROPERTY developer Magna Prima Bhd will launch three projects worth over RM700 million in the second half of 2009 to boost its income.

Its new chief executive officer Loo Kent Choong said it will launch One Jalil, a gated development in Bukit Jalil featuring 109 units of superlink homes worth RM85 million, in the third quarter.

By December, it will launch Magna Prima City, a RM600 million gated residential project along Jalan Kuching in Kuala Lumpur.

"Magna Prima is well poised given that it has potential landbank in prime areas in the Klang Valley.

"We hope to maintain our 2008 net profit and revenue this year. Sales from our on-going projects have been good," he said after the company's shareholders meeting in Selayang yesterday.

For the year to December 31 2008, Magna Prima posted a net profit of 27.28 million on revenue of RM344 million.

Its on-going projects are Magna Ville in Selayang, U1 Shah Alam and Dataran Otomobil.

An accountant, Loo said he joined Magna Prima as there was tremendous potential for it to grow. Magna Prima was in the limelight recently for various reasons.

Its CEO Lim Ching Choy and group managing director Datuk Steven Lee Kian Seng resigned in May. Lim is now the group managing director of Ho Hup Construction Co Bhd.

In March, Magna Prima announced a deal to buy 1.05ha of prime land in Jalan Ampang, Kuala Lumpur, from the Lai Meng Girls School Association for RM148 million.

The school association has confirmed that it would move to a site in Bukit Jalil, Loo said.

Magna Prima plans to build a 50-storey Class A office building, a 38-storey serviced apartment tower, and a two-level retail podium, worth RM1.3 billion on the existing school site.

It aims to start work in 2012.

By Business Times (by Sharen Kaur)

Gamuda rises on rating upgrades

Gamuda Bhd, Malaysia’s second-biggest builder, rose to a 10-month high after Macquarie Group Ltd and Maybank Investment Bank Bhd upgraded the company’s stock rating, saying it will benefit from the government’s stimulus package.

The stock rose 1.8 per cent to RM2.83, at 12.30pm, headed for the highest close since Aug 15. Gamuda shares have jumped 50 per cent this year.

There is an “urgency on the part of the government to accelerate the rollout of infrastructure projects,” Macquarie said in a report today. Gamuda is a “potential beneficiary.”

Prime Minister Najib Razak has announced two stimulus plans totaling RM67 billion (US$19 billion) to help resuscitate economic growth as the nation nears its first recession in a decade. Gamuda has an outstanding order book of RM8 billion that should support construction earnings, Maybank Investment said in a report.

The company is expected to bid for “major” contracts such as the Sepang budget airport terminal, the Pahang-Selangor water transfer project and the Klang Valley railway-line extension, Maybank said. It will also bid for mid-sized jobs, or contracts valued at less than RM1 billion, to speed up its order book replenishment, Maybank said.

Maybank raised the stock rating on Gamuda to “buy” from “hold” and increased the target price to RM3.35 from RM2.50.

The outlook on Gamuda’s construction business has turned “more positive” and the stock will “re-rate on the back of positive newsflow,” Macquarie said. It upgraded the stock to “outperform” from “neutral” and the target price increased to RM3.35 from RM2.30.

By Bloomberg

Malaysia to relook stamp duty rate

WORKS Minister Datuk Shaziman Mansor said the government needs to relook the stamp duty of 0.5 per cent on service contracts, as it is having a negative impact on the construction sector.

The new stamp duty rate, proposed under Budget 2009, makes a RM10 million construction contract attract an ad valorem duty of RM50,000.

The combined effect of stamping all agreements including sub-contracting and outsourcing at 0.5 per cent of the contract value is exponential and will be passed on to consumers, regardless of whether they are government or private contracts.

Master Builders Association Malaysia president Ng Kee Leen last week urged the government to revert to the previous practice of a RM10 flat fee on construction services agreements that do not require collateral.

"I support the contractors' call to relook into this stamp duty rate change," Shaziman told reporters after officiating at the Construction Industry Integrity Seminar organised by Construction Industry Development Board (CIDB) in Kuala Lumpur yesterday.

Asked if he specifically supported a complete waiver of stamp duty on construction contracts or to revert to the RM10 flat fee, he replied: "I support a revision. The decision lies with the Cabinet."

On the recent collapse of Jaya Supermarket in Petaling Jaya and the roof of Stadium Sultan Mizan Zainal Abidin in Terengganu, the minister said investigations are still ongoing and he hopes to receive the reports soon.

Shaziman said in the mean time, CIDB will continue to weed out contractors who are incompetent and not credible from its register.

"We don't want part-time contractors. We'll strike out the dormant ones," he said.

Currently, there are 63,000 contractors of varying grades registered with CIDB.

By Business Times (by Ooi Tee Ching)