KUALA LUMPUR – Iskandar Waterfront City Bhd (IWC) shares gained 3.77% after hitting a 10-year high in May, following speculations among investors over its probable win of the new Bandar Malaysia deal.
At 3.18pm, its share price climbed six sen to RM1.65, after paring gains, with 35.3 million shares done for a market capitalisation of RM1.4 billion. In a year, the stock has grown 65%.
Last month, the government opened up a second tender for parties to bid for the project after the initial master builder IWH CREC Sdn Bhd was terminated. The deadline has been set on June 30, with the decision to be announced by July 14.
SJ Securities Sdn Bhd remisier Goh Kay Chong said the market is speculating that IWC has a good chance of getting the tender of Bandar Malaysia project.
“The technical indicator shows that the stock is on the uptrend and funds are coming back to collect the stock. Resistance level is at RM1.87 and RM2.06,” he told theedgemarkets.com.
Goh said although the market may also be excited about the expected merger between IWC and its substantial shareholder Iskandar Waterfront Holdings Sdn Bhd (IWH), the more important deal remains the Bandar Malaysia project.
On May 3, Bandar Malaysia landowner and Ministry of Finance Inc wholly-owned unit TRX City Sdn Bhd terminated IWH CREC as master builder following its alleged failure to meet payment obligations outlined in a Dec 31, 2015 share sale agreement.
IWC CREC is a consortium formed by IWH and China Railway Engineering Corp (M) Sdn Bhd.
On May 5, IWH and IWC agreed to proceed with their merger as part of a proposed rationalisation and restructuring exercise to consolidate their land bank to create great synergies and economies of scale.
Under the merger scheme, IWH would acquire the remaining 61.7% stake in IWC and the former would assume the listing status of IWC.