The HSR could be one of the immediate catalysts for the sector moving into 1H25, and UEMS had been one of the most underperforming stocks over the last six months. While it may be speculative, if the HSR project is to be reinstated, UEMS will be the largest beneficiary among all other developers. More than 90% of its landbank is located in Iskandar Malaysia (4,471 acres worth MYR45bn GDV in Gerbang Nusajaya).
Although the alignment and stations are uncertain, having a station in Nusajaya/Forest City area is almost certain, in our view. Hence, given UEMS’ vast landbank there, it is wellpositioned to capture and benefit from the positive spillover.
the signing of a definitive agreement related to the Johor-Singapore Special Economic Zone (JS-SEZ) and recent news flow on the KL-SG HSR and Bandar Malaysia will likely buoy sentiment on the sector.
From the beginning the government already indicate that this HSR has to be privately funded before submission of proposal. Im sure all participants already find their way to fund it. If they cant fund it then why they submit proposal.
who want to put in money in Malaysia? A clear cut case of a mega Thief siphoning off $50B, CERTIFIED BY HIGH COURT AND COURT OF APPEAL, 9 UNANIMOUSLY I confirmed FRAUD AND GUILTY, can be manipulated by the streets macais as unjust, therefore justify jail at home. Who dare to invest $50b again in Malaysia when court judgement can be manipulated as they like?
The idea of transforming Johor Bahru into a special economic zone (SEZ) similar to Shenzhen was noting new as it was proposed 20 years ago but never took off. This is largely because Malaysia is one of the last places Singapore would consider for investment due to historical tensions.
The Johor-Singapore Special Economic Zone (JS-SEZ) is different, not for economic reasons but due to political realities. Singapore aims to make Johor a buffer zone for the "green tsunami." Singapore will ensure the success of the JS-SEZ so that JB people focus on business rather than engaging in political discussions that could incite racial hatred which will make the foreign investors in Singapore mentally uncomfortable.
We can forget about the high-speed bullet train in the context of the JS-SEZ. Singapore is well aware that it won't make a difference, as foreign investors are unlikely to invest billions of dollars in Malaysia due to unstable political reasons. Singapore is more concerned that Johor Bahru turning green will negatively impact their economy, as Singapore heavily relies on JB's water supplies.
Lee Kuan Yew said: "I would sleep more comfortably with Umno in power as it is a party I have known since the 1940s"
The SEZ will push up land prices (UEMS, Sunway) and create a lot of construction jobs (Gamuda, Suncon). But most of the high value businesses are expected to remain in Singapore and Suzhou Industrial Park and only those labor intensive low margin business will go JB as Malaysia education system failed to produce high tech workers so the economic multiplier effects of SEZ will be limited.
This economic zone was proposed 20 years ago to attract investments from the Middle East. However, after two decades of waiting, there are no signs of Middle Eastern funds showing interest in Malaysia. JSSEZ will become more of a political buffer zone for Singapore to distance or keep at bay the "green tsunami." If Johor turns green, Singapore would suffer the most, both economically and politically. As a result, Singapore will likely shift low-margin, labor-intensive industries (similar to JCY) to JSSEZ.
For sure Johor GDP will overtake KL in five to ten years time because Singapore will shift their low value products or so called backyard industries to JSSEZ to take advantage of cheaper land and labour in this areas but some analysts could have overestimated the potential of this is economic zone. 30 years ago Malaysia told the world we will become an automobile super power so we bought outdated technology from Mitsubishi but after 30 years we still don't know how to produce our own engine head so can we rival the development of Shenzhen? The answer is pretty obvious:)
When 吉利 was producing cheap freezer we already setup mega factory to produce Proton car but this Proton car was really a nightmare sometimes the power windows cannot open during humid day and cannot close during raining day so after 30 years Proton can't survive the global competition and sold to 吉利 which is world's number one automobile company so can JSSEZ mirror the development of Shenzhen? We need to fix our education system so that our students can count the math correctly or else no way Malaysia can compete with Vietnam and not to mention even US cannot compete with China in terms of technology development.
Singapore syndicate will gang up to push up land prices and many foreign workers in Penang and KL will move to JB and JB will become metropolitan similar to Penang or KL and nothing more so it is over hyped to say JSSEZ will become Shenzhen. 20 years ago we sold some big volume of palm oil to USSR and this calculative Russian instead of fully settle the trade with cash they offer us a free seat for space travel and Malaysia twisted the story and told the world we will become an astronaut super power so after 20 years we still cannot see a single rocket designed and build by our local university but China has landed their lunar spaceship to the moon so can we rival the development of Shenzhen? Hahaha...
30 years ago we invited Bill Gates to become our MSC advisor and then we told the world we will become internet super power of the world and that time 马云 was still a tour guide in Hangzhou who can speak very well English so one day billionaire Yahoo founder Jerry Yang visted China Jack Ma voluntarily become his tour guide free of charge and both of them become good friend so Jack Ma asked Jerry Yang to invest in his startup Alibaba and Alibaba becomes an internet super power and our MSC corridor still without a single window so can JSSEZ rival the development of Shenzhen? We need to do one thing at a time. We are telling the world we like to design our own CHIP to rival Nvidia but most of our high school students failed their math so most likely it will be an empty talk again just like the Lynas case.
If we like to rival the development of Shenzhen, we need to totally revamp our education system as 90,000 failed maths, 52,000 failed English. Most importantly, we need to allow international students to wear short pant in UM library or else no way top international students will come here to study for obvious reason. Also in the special economic zone we need to allow foreign investors to renew all their business permits online as sometime the offline security guards are too busybody and require everyone to follow his highest moral standard and as we know foreign visitors are puzzled by our high moral standard and don't like to wear long pants to fully cover their legs so it will be a cultural shock to them to do business here. In the worst case scenario, we may need to allow them to wear rainbow watch or else they will prefer to setup factory in Thailand for obvious reason:
The recent announcement on AI chip restrictions has really brought a dark cloud into the market. As long as there’s no clarification, this dark cloud will continue to hover. Even Suncon has been downgraded from 4.10 to 2.50 by JP Morgan. That’s no small downgrade.
Which counters get hit most? Those with high PE with no clear earnings visibility. Yes, we can argue about RNAV, but RNAV evaluations are also based on assumptions. The assumptions then was a lot of interest especially in the area of data centers and the like, for Chinese businesses to circumvent US regulations and tariffs in the coming year.
This does not mean the potential for the SEZ is no longer there. But it has thrown a spanner in the works, for now
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
mf
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uems & ecoworld