KUALA LUMPUR: The depreciating ringgit is a “silver lining” for the Malaysian property industry as local real estate will be priced more competitively against world markets, according to IJM Land Bhd chief executive officer Datuk Soam Heng Choon.

Soam said a weaker ringgit will not affect developers’ costs as long as they did not use imported goods.

“This is actually a silver lining for us. Chances are that people will come to Malaysia to buy properties because [the properties] will become cheaper.

“As long as we don’t use any imported goods, we’re okay,” Soam told reporters after the launch of IJM Land’s (fundamental: 2.2; valuation 1.8) Sherwood Kinrara South project here yesterday.

The ringgit’s weakness comes in the midst of slower Malaysian economic growth as lower crude oil prices hit government income and deficit levels. The ringgit also weakened against a firmer US dollar after the International Monetary Fund upgraded its US economic growth forecast.

Construction firm IJM Corp Bhd (fundamental: 1.6; valuation 2.4) is privatising IJM Land at RM3.55 a share. IJM Land shares closed up 1.76% at RM3.47 yesterday, bringing a market capitalisation of RM5.41 billion. A total of 1.72 million shares were traded.

Soam dismissed rumours that the privatisation would slow down IJM Land’s development.

He said upon completion of the exercise, IJM Land would leverage IJM Corp’s (fundamental: 1.6; valuation 2.4) balance sheet.

“We’ll be able to operate faster, which is one of the reasons we are privatising,” he said.

IJM Land will seek shareholders’ approval on the privatisation at an extraordinary general meeting on Feb 12.

Looking ahead, Soam said IJM Land would be kept busy by its 15 local projects collectively valued at about RM3 billion. He said the company had a land bank of over 2,000ha, with a gross development value of over RM30 billion.

Soam said the company will have several projects in Penang coming on stream.

“We will also use some of our remaining cash for land acquisitions,” said Soam.

The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on January 23, 2015.