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Reports Malaysia

Malaysia stock market and companies daily report (May 12, 2014)

May 12, 2014, Monday, 05:29 GMT | 00:29 EST | 09:59 IST | 12:29 SGT
Contributed by Shares Investment

CME Proposes Diversification Into Property Sector

- CME Group is poised to venture into property development and investment. The firm has proposed an acquisition of two freehold land parcels, measuring 15,784 square metres, in Mandurah, Western Australia, worth RM30 million (A$10 million).

- The land parcels were previously approved for mixed use development including apartment units, office and retail areas. The approval expired on 26 March 2012. Upon a successful acquisition, CME will make the necessary application to obtain the rights to develop the land sites.

- In order to fund the purchase, CME has laid out plans for a rights issue to raise up to RM35.3 million.

Significance: Taking into consideration the low profit margin offered by its existing business, CME has moved to widen its earnings base to include other streams of income. Property development and investment is expected to become one of the firm’s future core businesses.

Eco World Eyes Penang And Seberang Prai Projects Worth RM1.3b

- Eco World Development Group intends to launch two residential and commercial property projects in Penang and Seberang Prai worth RM1.3 billion in 2014 and 2015.

- Sitting on a land site measuring 5.3 hectares (ha) in Penang, the RM340 million residential project known as EcoTerraces is expected to open to buyers in August 2014. The development will house luxury landed homes, condominium units and a private residents’ club.

- In 2015, the firm is expected to unveil its RM920 million mixed development in Seberang Prai, named EcoMeadows, situated on a 24.3 ha freehold land parcel. It comprises of both landed and strata properties with facilities such as a mini mall.

Significance: Eco World’s president and chief executive officer, Datuk Chang Khim Wah, opines that the increase in developers interested in Seberang Prai is proof that the area is rapidly turning into a growth location.

Tropicana To Gain RM145m From Land Disposal

- Tropicana Corporation has agreed to sell eight land parcels in Kuala Lumpur, measuring about 3,138 acres, for RM448.4 million in cash.

- The buyer, known as Offshore Triangle, is a joint venture between Tropicana’s subsidiary, Supreme Converge, and Agile Property Holdings, a leading property player in China. This allows Tropicana to enjoy any future upside and prospects through its participation in the project’s development.

- Apart from repaying its bank borrowings and reducing its leverage, Tropicana is set to pocket RM145 million from sale, arising from appreciation in the land’s value.

Significance: With an undeveloped land of 1,954 acres and a potential new gross development value in excess of RM70 billion, Tropicana is on route to emerge as a strong property developer in Malaysia.