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Thursday, June 17, 2010

Sunway's (RM1.53) venture into Sri Lanka: Good! More to come??


News: Update - Sunway explores RM250m JV development in Colombo

I would say it's a good move for a company going into a country which is just starting to enjoy peace and political stability after decades of civil war. It is also good to go in at this time where there's not much competition coming yet unlike China which is saturated with too many property developers and contractors. The 26-year war left many parts of the country devastated, leaving the country in urgent need for reconstruction and new development projects including ports, power and other infrastructure development. Thus, there will be plenty of business opportunities to explore in Sri Lanka. I hope, just hope, that Sunway might explore investments which could bring recurring income to the company, such as toll roads, power or water sectors, just like Mudajaya and IJM which ventured into power stations and toll road operations respectively in India. It will be great to have Sunway venturing into recurring income businesses which will charter a new growth for the company and trigger an upward re-rating to its share price. Hopefully they are considering this.

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