UEM Sunrise jumps 5% after report on UEM-Samsung JV close to winning KL118 tower job

KUALA LUMPUR (Oct 21): UEM Sunrise Bhd saw its share price rallied as much as 5.13% this morning after The Edge Financial Daily reported the consortium that comprises the former's parent UEM Group Bhd and South Korean conglomerate Samsung is close to bagging the RM3.4 billion construction portion for the KL118 skyscraper.

As at 11.46am, UEM Sunrise pared some gains, rose five sen or 4.27% to RM1.22, with over 27.61 million shares traded, giving it a market capitalisation of RM5.54 billion.

It was reported that state-controlled unit trust company Permodalan Nasional Bhd (PNB) — the owner of the KL118 — is favouring the UEM-Samsung consortium over the other two shortlisted candidates, Malaysian Resources Corp Bhd (MRCB)-China State Construction Engineering Corp consortium, and WCT Bhd and its joint venture partner Arabtec Construction LLC.

The business daily, quoting sources, said that the deal is "almost certainly" going to the UEM-Samsung consortium.

The three were shortlisted from an initial group of six, which included IJM Corp Bhd in a three-way partnership with Norwest Holdings Sdn Bhd and Shimizu Corp; TSR Capital Bhd in a tie-up with Daewoo Group; and Seacera Group Bhd in joint ventures with Spaz Sdn Bhd and China's Sinohydro Corp-Shanghai Construction Group.

Last month, PNB had sought to lock in price validity periods for the construction of the KL118 for an additional 90 days, after the initial price validity expired in end-August.

Due to the volatile ringgit, the expiry of the validity period might not augur well for PNB as the costs of building would escalate.

The ringgit, which hit a low of 4.46 against the US dollar on Sept 29, has since strengthened and was at 4.2968 against the US dollar as at 12.15am today. -- theedgemarkets.com