Something that I learn today. In this current government which has been around for 8 years - a contract can still be terminated. No matter how foolish it was when one signed them during then. It is probably the only deal that one government should not make - and they had to do it as it was under immense pressure. I actually would like Malaysia to own Bandar Malaysia rather than a consortium which comprise of a tycoon, Chinese state company and Johor state.
There is no other better land left other than Bandar Malaysia which has immense value. This is a 486 acre land in the city - or near the golden triangle. In any case, if we have sold the controlling rights - I have also made to believe that the government still has a lot of says in the development order.
I was also being brought to think that the current government would not terminate a deal. One thing I thought (until today) that the current government has been doing well is its consistency - consistent in making good promises as well as consistent in making mistakes. Whatever it is, one has to be consistent - so that there are no surprises. Trustworthiness is worth many tens of billions (to a country), if you know what I mean. And it is priceless in fact.
What I have liked before (so far) is in the present government - A deal is a deal, that's what I was brought to have thought on. But yes today, things changed - a contract can be terminated as well. Yes, there has been statements that the other party have yet to fulfil its promises, but we investment public is caught unaware.
Doesn't matter that the investment involves a Chinese party. How then would it impact say other projects that China's investment parties are involved in? Forest City? ECRL? Port projects? What about other countries? such as the recent deal between Saudi and Petronas in Pengerang?
Decisions are decisions - once a promise been made, we have to live by it.
No matter what, I have always been brought up and later telling the story (to convince other people ) that the Malaysian government would make promise on what it signs on. Why? This is because we are an open economy that has always been open to investment - since the 1970s. We are different compared to many African government. We are different compared to India. We are also among the more trustworthy countries and commit to its agreement.
This I have to take back - for the moment.
This lesson will make me readjust on my investment too, as would it happen to any other projects that the government has signed on?
Well, we are also living in a times where US is also considering pulling back NAFTA. But yet again, Malaysia and US are different - right? One has an immensely large local economy. Another has a much interdependent economy.
11 comments:
Hi Feli,
You might have forgotten that this is BOLEH-land. Anything BOLEH happen....
And why "bad" news always happened in May??
Agreement is still valid provided the opponent party fulfill the condition, but it clearly stated they didn't pay up accordingly despite extension given for so many times. I don't see anything wrong for MOF to make up such decision
is it opportunity to owns more ekovest since its asset is starting to generate cashflow?
On fundamental side of things, I think it impact Ekovest little.
On the other hand, on political side of things, it does have impact.
Bandar Malaysia is such a strategic location, can't believe anyone would just give up, perhaps there is "other arrangement"? In exchange of sth else?
Bandar Malaysia is such a strategic location, can't believe anyone would just give up, perhaps there is "other arrangement"? In exchange of sth else?
Hi Felicity, u reckon its a good time to accumulate more Ekovest?
On fundamental side of things, I think it impact Ekovest little.
On the other hand, on political side of things, it does have impact.
Based on above, do you mind to elaborate more thanks
My thought is that with the projects that have already commenced, Ekovest is still undervalued - more so that it is now trading at RM2.5 billion. On the other hand, the management has always have strong relationship with government.
I have mentioned before it is not the Gamuda / IJM / Sp Setia / Ecoworld in master development, construction. However, it does get things done well enough.
This event, I am not able to comprehend how does it come into this way as I would have thought that with CREC it is a very strong partner. But yet, there is a delay in payment. There must be a lot of challenges behind the scene.
Usually, for me if a government wants certain things to happen, they have to accommodate - not by insisting. That's how a government works best.
It is also unusual that 2 months ago EWCITY made a preparation for restructuring and this things takes time. However, yesterday it was announced that no- I am not going to give you more time.
It is highly unusual. I mentioned of many other projects that are at hand. What happens to them as it is important that a party is seen as wanting to help. One cannot just go ahead and say you have missed your deadline as these are huge projects.
Hence, politically, there must be things which we do not know.
On whether ekovest is buyable - I think I would just sit and wait for now.
EKOVEST is of course a good investment provided the investment horizon is long enough.
Situation may be a bit rough for EKOVEST if PR win next GE, which is highly unlikely.
If Hishammuddin becomes the PM of Malaysia, EKOVEST will be in a very favorable position.
thank you so much !
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