ECWI Up After Ending Agreement Limiting Its Role In Malaysian Property Sector
KUALA LUMPUR, May 2 (Bernama) -- Eco World International Bhd’s (ECWI) share price rose in the morning trading session after the company’s proposal to end a collaboration it entered into with Eco World Development Group Bhd (EcoWorld Malaysia) to explore property investment and development opportunities in Malaysia.
At 10 am, the company’s share price increased by four sen to 25.5 sen, with 8.31 million shares changing hands.
The agreement was reportedly signed between both parties in 2016, which imposed geographical restrictions on property development or investments for both companies.
Under the agreement, ECWI agreed not to undertake property development or investments in Malaysia, while EcoWorld Malaysia will not undertake any projects outside the country, except via ECWI.
In a note, Maybank Investment Bank Bhd (Maybank IB) is positive on ECWI’s latest move, which allows it to enter a relatively more stable Malaysian property market following the termination of the 2016 agreement.
“We are positive on ECWI’s latest corporate development, which marks a strategic shift to re-enter a more stable and visible Malaysian property market, compared to its existing exposure in London and Australia, where all planned launches are currently on hold due to market challenges.
“The move enables ECWI to tap into local opportunities by leveraging its strong balance sheet, allowing for future collaborations with EcoWorld Malaysia, providing a fresh income base, and reducing earnings volatility from overseas projects,” it said.
The note said ECWI aims to raise about RM500 million from unsold inventory sales (worth about RM230 million) and land in London over the next 18-24 months to fund potential land acquisitions in Malaysia.
With its planned local expansion, ECWI may revise its dividend commitment between 2025 and 2026, Maybank IB said.
It is maintaining the company’s earnings forecast with a target price of 27 sen.
-- BERNAMA