Dahua Jixian: Malaysia International Shipping's merger and acquisition of Bumi Amada faces huge resistance
(KUALA LUMPUR, 10th) Dahua Jixian believes $MISC(3816.MY)$ Malaysia International Shipping and $ARMADA(5210.MY)$The potential merger and acquisition of Bumi Amada will face huge resistance and is unlikely to be implemented.
Analyst Dahua Jixian pointed out that since shareholders and stakeholders of the two companies may oppose the merger, and there is a lack of financial synergy between the two parties, it is difficult for Malaysia International Shipping to acquire Bumi Amada.
“Although the merger of the two parties may bring complementarity and synergy effects in some businesses, we believe this merger and acquisition plan is facing too much resistance.”
He added that Bumi Amada is involved in a long-term payment-related dispute over the Armada Sterling V floating storage and offloading production tanker (FPSO), which may also affect the above merger and acquisition plans.
Furthermore, even if it is just a merger of the two parties' FPSO businesses, analysts believe this will face resistance from India's Shapoorji Pallonji Energy (SPE).
“SPE was an important partner of Bumi Amada after entering the FPSO field in 2014, and the company recently got rid of operational difficulties and became a common competitor of Malaysia International Shipping and Bumi Amada.”
At the same time, he said that the undersea fleet operated by Bumi Amada in the Caspian Sea is still losing money; this will result in Malaysian international shipping...

Retail hospitality prospects are good, but the office and industrial sector are lagging behind
Welfare policies have been introduced, tourism has recovered, unemployment has been mitigated, and the prospects for local retail and hotel real estate are bright.
However, the vacancy rate of offices in our country remains high, causing property trusts, which focus on office buildings, to continue to face pressure; while industrial property trusts are popular, the hot market has also caused industrial prices to soar, limiting rent rates.
As a result, Hong Leong Investment Bank research only gave the real estate trust sector a “neutral” rating.
The recovery of retail real estate is strengthening
Analysts pointed out that China's retail sector is strong, mainly recovering from the COVID-19 pandemic, and research suggests that the upward trend will be maintained.
The 13% annual salary increase for public servants, the launch of a third employee provident fund account, an improvement in the unemployment rate, and a stable salary for employees all led the study to believe that personal expenses would increase, thereby stimulating the return of consumers and the growth of retail space leasing.
However, Merdeka 118 Shopping Mall and Phase 2 of the Damansara Highland Park will both be put into operation this year, which may curb the upward space for rents in existing popular shopping malls.
Travel recovery benefits hotels
On the other hand, the number of visitors to Malaysia in the first quarter of this year recorded 5.8 million; while our country's hotel operations are expected to maintain good performance in the short to medium term as the number of visitors to Malaysia grows.
The main shopping mall located in the capital Kuala Lumpur will be stimulated by travel spending based on the extension of the convenience policy that exempts Malaysian and Chinese travelers, the restoration of international flight momentum, and the expansion of the number of travelers.
Also, urban real estate in the city $KLCC(5235SS.MY)$ Its Longshi Oriental Mandarin...

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