PETALING JAYA: The stocks of listed property developers with exposure to Johor surged today following the government’s announcement of a plan to make Forest City, developed by China’s Country Garden, into a special financial zone.
UEM Sunrise Bhd, developer of Iskandar Puteri in Johor, hit an intraday high of 73.5 sen, up 9.7% or 6.5 sen, before paring its gains to end 4.5 sen or 6.7% higher at 71.5 sen, valuing the group at RM3.62 billion.
It was the fifth most active counter on Bursa Malaysia today with 97.9 million shares traded.
SP Setia Bhd, which also has a significant presence in Johor’s property market, ended at 92 sen – nine sen or 10.8% higher – valuing the developer at RM3.75 billion. SP Setia has been on a roll, surging 124% in the past year and 50.8% year-to-date.
Ekovest Bhd was the most actively traded stock on Bursa Malaysia today with 188.8 million shares exchanging hands. It ended four sen or 8.8% higher at 49.5 sen with a market capitalisation of 1.33 billion. It rose as much as 13%, touching an intraday high of 52 sen.
Iskandar Waterfront City Bhd (IWCity) was the third most active counter on the bourse with 114.8 million shares traded. It rose as high as 15.1% or nine sen to 68.5 sen before ending at 66 sen, or up 6.5 sen or 10.9%, valuing it at RM608 million.
Special incentives for Forest City
Last Friday, Prime Minister Anwar Ibrahim announced the government’s intention to turn Forest City into a special financial zone to harness on the investment, growth and economic opportunities in Johor given the state’s strategic location, and soaring property prices in Singapore.
He also announced a slew of incentives to attract investments for Forest City including multiple entry visas, fast track entry for those working in Singapore, and a standardised income tax rate of 15% for knowledge workers.
RHB Research pointed out the Malaysia-Singapore Second Link region stands a chance to benefit more from the government’s move given the vast land resources, efficient infrastructure, and its proximity to Forest City.
“Unlike the Johor Bahru city centre or vicinity surrounding the causeway that is already crowded, the Second Link area has plenty of land bank, and well-developed infrastructure and amenities,” it said in a note today.
In the longer term, property developers like Eco World Development Bhd, SP Setia, UEM Sunrise and KSL Holdings Bhd, are best placed to benefit from the increasing investments and job opportunities to be generated by the project.
Maybank Investment Bank Bhd said the government’s initiative will lead to a significant rise in the state’s development potential and that local developers will benefit from the project’s spillover.
“This strategic move not only fosters economic diversification and balances growth in the different regions of Iskandar Malaysia, but also offers sizable job creation potential and heightens Iskandar Malaysia’s investment attractiveness,” it said.
It also noted the potential to attract investors from Singapore who are in search of affordable alternatives, and will be key to balance trade and spur economic growth in the southwestern region of the state.
“Currently, business activities are concentrated in Johor’s CBD (central business district), which will be further boosted by the upcoming Johor Bahru-Singapore Rapid Transit System, while the southeastern region is driven by oil and gas activities,” it added.