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MRCB assisting EPF in RRI land masterplan, says RHB Research

KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) is helping its parent company, the Employees Provident Fund (EPF), to prepare the masterplan to develop the Rubber Research Insitute (RRI) land in Sungai Buloh, according to a report by RHB Research Institute yesterday.

In the research report, RHB said that MRCB is actively “assisting” EPF in drawing up the masterplan for the 3,300-acre land.

“However, MRCB qualified its statement by saying that EPF is also assisted by other parties,” the report stated.

EPF was given the mandate by the government to develop the RRI land that is estimated to fetch a gross development value of over RM10 billion. The announcement by Prime Minister Datuk Seri Najib Razak in March this year put to rest the status of the parcel of land which attracted interest from several well-connected developers and individuals.

According to the RHB Research report, MRCB had said that given the time and efforts already put into the project, it hoped to gain a “more significant role (vis-à-vis other property players)” in the project.

“Our belief is that MRCB will rank a level above other developers in the project,” the report stated.

With EPF holding 41.9% in MRCB, the developer had been touted as a leading candidate to develop the RRI land. MRCB is known for its KL Sentral development which is at the tail end of completion.

The development of the RRI land is not expected to take off within the next year as relocation of the staff quarters and work station at RRI has yet to start. In the meantime, MRCB has some RM1.2 billion worth of works at KL Sentral.

Apart from the RRI land, MRCB was also the front runner to develop the government’s 150-acre parcel at Jalan Cochrane.

But according to the RHB Research report, the land at Jalan Cochrane may now be auctioned.

RHB maintained its trading buy on MRCB with a fair value of RM1.96 as it is upbeat on the construction sector, with stocks to outperform the market in second half of the year.

RHB reduced its indicative fair value by 7%  to RM1.96 from RM2.10 based on sum of parts, largely to reflect the downgrade in its earnings forecasts.

MRCB rose nine sen to close at RM1.73 yesterday with 11 million shares traded.


This article appeared in The Edge Financial Daily, July 22, 2010.

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