MY Morning Wrap | Gamuda's Joint Venture Receives Approval for Ulu Padas Hydroelectric Project in Sabah

The stock market experienced a significant decline on Friday, continuing the volatility seen at the beginning of September. The $S&P 500 Index (.SPX.US)$ dropped below the notable 5,500 point threshold, a dramatic shift from its performance in June and August. Significant losses were seen across major indexes with the S&P 500 falling 1.73%, the $Dow Jones Industrial Average (.DJI.US)$ decreasing by 1.01%, and the $Nasdaq Composite Index (.IXIC.US)$ plunging by 2.55%. This downturn marks a shaky start to the month, reflecting persisting market uncertainties.

$YTL (4677.MY)$: The Malaysian Anti-Corruption Commission (MACC) has announced the initiation of an investigation into YTL Communications Sdn Bhd, focusing on allegations of corruption, embezzlement, and abuse of power linked to the Education Ministry's 1BestariNet project. YTL Communications, which is 60% owned by YTL Power International Bhd (KL:YTLPOWR), is under scrutiny following complaints and evidence presented in a report by the governance, procurement, and finance investigation committee received in August, along with findings from the Public Accounts Committee. This investigation aims to uncover and address any potential misconduct involved with the project's implementation.

$GAMUDA (5398.MY)$: Malaysian construction giant Gamuda Bhd announced that its joint venture, UPP Holdings Sdn Bhd, has received approval from the Sabah energy regulator to construct the Ulu Padas hydroelectric project. Gamuda holds a 45% stake in the venture, alongside partners Sabah Energy Corp Sdn Bhd with 40% and Kerjaya Kagum Hitech JV Sdn Bhd at 15%. Scheduled for commercial operation by the end of 2030, the project is expected to generate over RM400 million in annual revenue. Located in the Tenom and Sipitang districts, the hydroelectric facility will produce approximately 1,052 Gigawatt hours of clean energy yearly. Additionally, a hybrid floating solar plant will be integrated by 2031 to further enhance clean energy output.

$MYEG (0138.MY)$: MyEG Services Bhd, a prominent Malaysian e-government service provider, has announced a strategic partnership with East Logistics Link Co Ltd (ELLC), an agency wholly owned by the General Administration of Customs of the People’s Republic of China. Under a newly signed heads of agreement (HOA), MyEG and ELLC will work exclusively to secure and operate the Royal Malaysian Customs's “single window” project. The collaboration will focus on implementing the project, structuring its framework, obtaining necessary regulatory approvals, developing a comprehensive business plan, securing funding, and engaging with relevant Malaysian authorities to successfully pitch the project. This partnership aims to enhance the efficiency and effectiveness of customs operations in Malaysia.

$MISC (3816.MY)$: MISC Bhd, a Malaysian maritime conglomerate, has entered into an agreement with the Netherlands-based SBM Holding Inc, a specialist in floating production storage and offloading (FPSO) operations, to exchange ownership interests in two FPSO vessels. As part of the deal, MISC will acquire SBM's 49% equity interests in Malaysian Deepwater Floating Terminal (Kikeh) Ltd (MDFT) and Malaysian Deepwater Production Contractors Sdn Bhd (MDPC), which own the FPSO Kikeh located in Malaysia. These acquisitions will make MDFT and MDPC wholly-owned subsidiaries of MISC. Conversely, MISC will divest 49% of its equity interests in four Brazilian entities—Brazilian Deepwater Production BV (BDPBV), Brazilian Deepwater Production Contractors Ltd (BDPC), Brazilian Deepwater Production Ltd (BDPL), and Brazilian Deepwater Floating Terminals Ltd (BDFT)—which collectively own the FPSO Espirito Santo in Brazil, to SBM. Following this divestment, these four entities will no longer be joint ventures of MISC. This strategic realignment of assets is aimed at optimizing both companies' operations in their respective regional markets.

$GADANG (9261.MY)$: Gadang Holdings Bhd, a Malaysian infrastructure company, has been served with a civil lawsuit by JF Foundation (M) Sdn Bhd, a subcontractor involved in the Johor Bahru–Singapore Rapid Transit System (RTS) Link project. The lawsuit, filed against Gadang's wholly-owned subsidiary, Gadang Engineering (M) Sdn Bhd (GESB), and its own subsidiary, Usaha Pesona Sdn Bhd, claims RM9.77 million in alleged outstanding payments for bored piling works completed on the RTS Link project. According to the subcontractor, Usaha Pesona has made a total payment of RM17.88 million, adjusted after materials back-charge, against a claimed amount of RM55.04 million. The legal filing highlights ongoing disputes related to payment and contract management within large-scale infrastructure projects.

$VARIA (5006.MY)$: Varia Bhd, through its wholly-owned subsidiary Pembinaan Teguh Maju Sdn Bhd, has been awarded a RM334.69 million subcontract for flood mitigation works by Ikatan Harmoni Sdn Bhd. The project involves constructing a flood control reservoir in Kota Tinggi, Johor, and is scheduled to span 60 months, starting from July 23, 2024, with completion targeted for July 22, 2029. This new contract follows closely after Varia's recent RM410.3 million flood mitigation project in Segamat, bringing its total job wins for 2024 to an impressive RM1.46 billion. This series of projects underscores Varia’s expanding footprint in infrastructure development focused on enhancing flood resilience.

$OSK (5053.MY)$： OSK Holdings Bhd has announced the expansion of its cable manufacturing capabilities through the acquisition of assets from the now-liquidating Universal Cable (M) Bhd. The deal, valued at RM85 million, was conducted by OSK Holdings' 97.47%-owned subsidiary, Olympic Cable Company Sdn Bhd. The acquisition includes two manufacturing plants located in Tebrau and Plentong, along with their associated land and machinery. These assets had a reported net book value of RM146.04 million as of the end of May. This strategic move is set to enhance OSK Holdings' production capacity and market presence in the cable manufacturing sector.

$DPHARMA (7148.MY)$: Duopharma Biotech Bhd has announced the extension of Leonard Ariff Abdul Shatar's contract as Group Managing Director (MD) for an additional year, through to December 31, 2025. Leonard Ariff, who has led the company since December 28, 2017, will continue his tenure starting from December 9, 2024. Alongside this extension, Duopharma has developed a succession plan for the group MD role, which is being overseen by the company's nomination and remuneration committee. This plan aims to ensure a seamless transition in the company's executive leadership in the future.