- The Star reported that plans are in the pipeline for the construction of a new coastal highway that will link the east coast of Peninsula Malaysia.This would run from Kota Baru , Kelantan to Pengerang in Johor.

- The Star report quoted Malaysian Highway Authority (LLM) Director-General Datuk Ismail Mohd Salleh as saying that the federal government is already weighing the viability of this project before deciding on it. However, discussions are still preliminary.

- As most parts within the west coast of Peninsular Malaysia are already well-served with road connectivity and highways, we appreciate the need to improve linkages over at the east coast.

- Among the factors being considered is the present traffic volume as well as future estimated figures. Notably, this is crucial to spur new developments within selected areas of the east coast: (i) Pengerang is fast-becoming a regional hub for the oil & gas industry; and (ii)Desaru, where plans are already afoot to transform the area into a leading leisure and hospitality spot in the region.

- Our industry checks indicate that the east coast highway has been under consideration for quite some time.

- While it is still in the early days, we see rising infrastructure newflow emerging for Iskandar Malaysia. This news comes just a day after the Malaysia Steelworks (KL) Bhd announced that its 60%-owned unit Metropolitan Commuter Network (MCN) received the nod from the Ministry of Transport (MoT) to operate a 100km inter-city rail system from IM to Singapore.

- Earlier, two other mega rail projects in IM are also set to take off within the next one to two years: i.e. the KL-Singapore High Speed Rail (HSR) and JB-Singapore Rapid Transit System.

- We frontline IJM, Gamuda, WCT and KimLun Corp as potential winners for infrastructure works within IM. Ann Joo, Lion Industries and Lafarge would get a significant kick as suppliers of building materials.

- Moving onto property development, we see IJM Land, Crescendo and UEM Land being among the key beneficiaries of the Coastal Highway. IJM Land’s high-end Sebana Cove development is located close to the Pengerang area.

- Similarly, Crescendo has a 794-acre tract of land under Ambok Resorts that is within close proximity of Desaru/Pengerang while UEM Land has already kick-started phase 1 of the Desaru Coast development in a JV with Khazanah Nasional.

- Finally, improved linkages would also improve the overall viability of Benalec’s Pengerang landbank measuring some 1,760 acres out of a total of 5,245 acres of its land concessions in South Johor.

Source: AmeSecurities