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Elanco to become No.2 in animal health with US$7.6b Bayer deal

AUGUST 20 — Elanco Animal Health agreed to buy Bayer’s veterinary drugs unit today in a cash and stock deal valued at US$7.6 billion, creating the second largest animal health business and expanding Elanco’s reach online. The deal is the…


China factory price tumbles as demand weakens

BEIJING, Aug 9 ― Chinese factory price inflation fell below zero for the first time in three years, official data showed today, the latest sign of weakening demand amid mounting trade tensions with the US. The producer price index (PPI) ― an…


China investors’ appetite for Malaysian properties grows

KUALA LUMPUR: With investors from China showing strong interest in properties in Southeast Asia, Chinese investments in Malaysia’s residential real estate are expected to double by 2025.

According to Juwai.com chairman Georg Chmiel, about US$4 trillion (RM16.4 trillion) worth of properties were advertised on the site while some RM9.5 billion worth of properties across key locations in Malaysia were transacted through the online platform last year.

“Historically, the most popular markets for Chinese buyers have been the US, Australia and the UK. Due to political reasons, Brexit, trade war, legislation in Australia which puts a higher stamp duty on foreign buyers, there have been some shifts and new markets have emerged, such as Malaysia, Thailand and Vietnam, or in general, Southeast Asia,” he told SunBiz.

Chmiel said Juwai.com, which is a platform that markets properties worldwide to Chinese investors with about three million listings in a month, has seen a strong increase in Chinese appetite for properties in Malaysia, Thailand and Vietnam.

“We’ve also seen that there was a connection between big trends like the Belt and Road Initiative, investments into Malaysia and investments into real estate,” he said.

Based on data from Juwai.com, demand from Chinese buyers for Malaysian real estate has been growing consistently, soaring 600% since 2017, indicating growing demand for quality projects.

As for incoming enquiries on Juwai.com, 80% are within the RM1 million to RM2 million price range, 10% within RM2 million to RM4 million and 8% for properties priced above RM4 million.

“One of the big themes in Malaysia is affordable housing, which is for local buyers, but I think it is very important for the developers that there is always a fair mix of different categories for them to also make money, to earn money, to also sell higher-end type of properties,” Chmiel said.

He said most of the properties acquired by Chinese investors are located in Kuala Lumpur, Penang, Johor, Malacca and Sabah, with the majority being residential properties and one-fifth comprising industrial, commercial and retail properties.

Realising this growing demand, Malaysian digital real estate marketplace MHub has teamed up with Juwai.com to attract and assist more Chinese investors in their property purchases here.

MHub co-founder and CEO Quek Wee Siong said there are several Malaysian property developers on its platform who are building projects around areas that Chinese investors are interested in, namely Kuala Lumpur, Penang, Johor and Malacca.

“Currently it makes up close to 20% of our entire stock inventory and we intend to grow this with Juwai.com. That’s why we inked this agreement. The idea of this partnership is to help property developers here to streamline the process, to get better leads and better conversion,” he said.

Under the partnership, MHub will provide the inventory of properties while Juwai.com will provide services in China including lead qualifying and identifying the type or properties that Chinese investors want, before passing on the leads to agents in Malaysia and MHub will provide a suite of services to complete the acquisition process.

“In the database, we have about 10% transactions from overseas buyers. With this of course our goal is basically to help property developers in Malaysia, those with high price tag targeting foreign buyers, to increase the conversion rate. At the moment, they are marketing it themselves but if they have the right partners like Juwai.com, I’m sure we can easily double these enquiries and transactions within the platform,” said Quek.

Chmiel said the US-China trade war has, in some ways, diverted Chinese investors to Southeast Asian properties and he believes that the shift is sustainable as investors are now forging strong connections here.

“I think the trade war will shift the dynamics on a global scale more permanently. Growth will obviously resolve but so far Thailand, Vietnam and Malaysia are benefiting to a certain extent from the trade war, for the automotive supply industry as well as supplies for technology and telecommunications which are being produced here,” he said.

Chmiel said the trade war has resulted in many companies looking for partners elsewhere and are unlikely to return to the US once strong relationships are formed and substantial investments made.


VW trucks division Traton skids on stock market launch

FRANKFURT, June 28 — Shares in Volkswagen’s heavy trucks division Traton slid in their first minutes of trading in Frankfurt today, although the group was spared the abrupt tumbles that have met some IPOs this year. Stock in the group, which is…


Litrak share price jumps on govt offer for highways

PETALING JAYA: Lingkaran Trans Kota Holdings Bhd’s (Litrak) share price jumped as much as 79 sen or 18.8% to a nine-month high of RM5.00 today on news that the government is offering RM2.75 billion to acquire its highways Lebuhraya Damansara Puchong (LDP) and Sprint, which is operated by subsidiary Sistem Penyuraian Trafik KL Barat Sdn Bhd.

The stock closed 70 sen or 16.63% higher at RM4.91, being the second top gainer on Bursa Malaysia with 3.71 million shares done.

Maybank IB Research said the Ministry of Finance’s (MoF) offer price translates into an effective equity value of RM2.75 billion (RM5.207 a share) for Litrak’s two highways, 8% above its equity discounted cash flow (DCF) value of RM2.55 billion.

“In an environment of tapering traffic growth and unlikely scenario of an extension of the concessions for both LDP and Sprint, we believe further upside for Litrak is capped. Our DCF-based target price is raised to RM5.21 (from RM3.90) to reflect the takeover value. With a potential upside of 24%, we tactically upgrade Litrak to a buy,“ MaybankIB said in a report today.

Also, it believes the LDP and Sprint concessions are unlikely to be extended beyond August 2030 (for LDP) and December 2034 (for Sprint).

Meanwhile, MIDF Research said from a shareholder’s perspective, it believes that the offer is appealing. The combined price tag of RM2.75 billion for both highway concessions translates into a price-to-book value (P/BV) of 2.96 times, a 24% premium to the 12-month trailing P/BV of 2.39 times.

On the outlook for Litrak, MIDF said the average weekday tollable traffic volume plying through LDP and Sprint has been on the downtrend since FY15 following the toll hike in October 2015.

“We expect growth in traffic volume to remain muted as the ridership of public transportation such especially LRT (Star and Putra), KTM Commuters and KVMRT Line 1 has been on an upward trajectory. Moreover, the introduction of the unlimited monthly pass called My100 and My50 will further encourage the use of public transportation in the near term,“ MIDF said in a report today.

In the longer term, the completion of KVMRT Line 2 in 2022 which connects Sungai Buloh, Serdang and Putrajaya combined with the possible reinstatement of KVMRT Line 3 will exacerbate the downside risk on tollable traffic volume.

“Specifically for Sprint, the Damansara Link runs parallel to the stretch of KVMRT Line 1 from Semantan Station to Taman Tun Dr Ismail station and we opine that the impact towards traffic volume will be more pronounced with the continuous improvement in public amenities and con-nectivity.”

Of the four stations competing directly with Damansara Link, Phileo Damansara and Pusat Damansara Station are equipped with park and ride facilities with over 500 car parking bays.

MIDF upgraded Litrak to “trading buy” with a revised target price of RM5.21 a share.

“Due to the attractive upside from the current price and our valuation, we advise investors to accept the offer as an exit strategy amid the lack of catalyst LDP and Sprint. As such, we upgrade our call on Litrak from neutral to trading buy with a target price of RM5.21 per share, reflecting the offer price by MOF Inc, on the basis that the deal will go through.”


Gamuda’s cash position set to significantly enhance with tolls disposals

KUALA LUMPUR, June 24 — Gamuda Bhd’s cash position will be significantly enhanced, providing significant liquidity to its asset profile, upon successful acquisition of its four tolls by the Finance Ministry. MIDF Research said it…


FirstGroup reaches end of the line of Greyhound bus ride

LONDON, May 30 — Dallas-based Greyhound was put up for sale by Britain’s FirstGroup today as the North American bus line battles to compete with growing pressure from low cost airlines. Greyhound has been a household name in North America since…


Monsanto kept ‘watch lists’ in seven EU countries

FRANKFURT AM MAIN, May 21 — German chemicals and pharmaceuticals giant Bayer said today that US seeds and pesticides maker Monsanto, which it bought last year, kept lists of key pro- or anti-pesticides figures in at least seven EU countries. On…


NHS England, Biogen reach deal on pricey drug for deadly disorder

NEW YORK, May 15 — England's National Health Service said it had reached a deal to pay for US drugmaker Biogen Inc's expensive spinal muscle atrophy treatment Spinraza. NHS England said it reached a “managed access agreement” with Biogen under…


Toy story: Asia’s richest man buys Britain’s Hamleys for US$88m

HONG KONG, May 10 — Asia’s richest man Mukesh Ambani has snapped up the storied British toy store Hamleys from its Chinese owners for US$88 million (RM365.5 million), the latest in a dizzying splurge of retail acquisitions. Ambani’s Reliance…