AHEAD OF BEIJING ANNOUNCEMENT, 1MDB-LINKED CHINA RAIL STARTS TO BUY INTO PROPERTY FIRM TITIJAYA?

PETALING JAYA: China Railway Group Ltd (CREC) is said to be buying shares in Titijaya Land Bhd, sparking speculation that the Chinese company is building a strategic stake in the property developer.

The share purchases, done via several off-market trades, came ahead of a signing ceremony between the two companies on Nov 8.

Yesterday, a block of 10.2 million Titijaya shares, or 2.5% of the company, changed hands in an off-market trade at RM1.72. This was on the back of another off-market transaction of 15 million Titijaya shares done at RM1.76 on Oct 18.

Sources said the buyer of the blocks of shares was either CREC or some other related China parties.

Shares in Titijaya fell six sen to RM1.81 yesterday.

In a recent invite to fund managers, the media and brokers, Titijaya stated that the company was currently in its new phase of growth and expansion.

“Through this signing, there will be a new growth plan by the company to increase its business performance, create competitive advantage and improve the company’s long-term earnings visibility,” said Titijaya’s invite. The signing ceremony will be attended by the chairman and managing director of China Railway Engineering Corp (M) Sdn Bhd Cai Zemin and Wang Youping.

Meanwhile, officiating at the event will be Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar.

There is speculation that Titijaya could emerge as a local partner for CREC.

Titijaya is said to be a frontrunner to win affordable housing projects by the Government, following various measures announced by the Government under Budget 2017 to increase the supply of affordable housing.

There is a need to develop affordable housing at Bandar Malaysia, a RM200bil development in which CREC is one of the companies in a joint venture (JV) that is developing the project. CREC, along with Iskandar Waterfront Holdings and the Ministry of Finance Inc, is already the master developer of the Bandar Malaysia project. The development will feature the world’s largest underground city, shopping malls, indoor theme parks, a financial centre and the regional headquarters of CREC.

Over and above that, CREC’s tie-up with Titijaya is likely just a piece of a puzzle in a much larger picture. China, via CREC, has massive plans for Malaysia and intends to make it its hub for its “One Belt, One Road”, new Silk Road initiative.

At present, China via its state-owned corporations is already in JVs and engagements in a huge line-up of infrastructure projects, particularly rail projects in Myanmar, Laos, Cambodia, Thailand, Malaysia and Indonesia.

These are all part of China’s plans to create a new connectivity and link the entire South-East Asian region to be one borderless economic region. The cherry for these ambitious plans will be in Malaysia though, where CREC’s regional hub will be housed in Bandar Malaysia.

In recent times, Malaysia and China’s relationship appears to have taken a new direction.

Prime Minister Datuk Seri Najib Tun Razak begins his official visit to China today till Nov 4. Malaysia and China will be signing at least 10 government-to-government memoranda of understanding during Najib’s visit.

The signings will include those on investment, construction, finance and e-commerce. Others include those on solar panel production, port development, gas pipe construction and the building of water desalination plants.

ANN

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