IJM/Gamuda

Previously, there had been speculation that IJM and Gamuda are planning to merge. But no, would such a merger still merit?

The global financial crisis is not only hurting construction players like Gamuda and IJM but also the pockets of the wealthy Middle East funds as well. The Arabs now (Oct 2008) earn less in terms of petrol dollars as the crude oil price has tumbled and they are seeing their assets shrinking in values.

With the world’s economy at risk of grinding to a near halt, the brakes may be applied on the construction and development activities in the Gulf region that until recently had been growing at a break neck pace. This could be ultimately translate into a possible shift in investment priorities among the Middle Eastern funds and that could change the earlier plans for IJM and Gamuda.

A source familiar with the IJM and Gamuda deal assures that the plan is still moving along. Negotiations with certain parties are taking some time.

Skim Amanah Saham Bumiputera (ASB), a unit of PMB, has been accumulating shares in Gamuda.

ASB recently emerged as a substantial shareholder in Gamuda with a 5.08% stake as at Oct 2008. ASB is now the third largest shareholder in Gamuda.

Over at IJM, the EPF raised its holding to 20.95% as Oct 2008.