KUALA LUMPUR: Intense speculative activity in construction and property development company Fajarbaru Builder Group Bhd has pushed its shares to their highest levels in more than a year.

Over the last two days, the stock has jumped by 23.5 sen and closed at RM1.08 yesterday.

Fajarbaru managing director and CEO Datuk Low Keng Kok is travelling overseas and could not be reached for immediate comment.

Its chairman and executive director Datuk Kuan Peng Ching @ Kuan Peng Soon said he was unaware of the surge in trading in the company’s shares. “I am not aware of why [the stock has gained]” he told The Edge Financial Daily in a brief telephone interview.

Several brokers said they were unaware of any major change in shareholding at Fajarbaru and speculated that the company could be a target of market speculators.

The largest shareholder of Fajarbaru is Big Victory Holdings Sdn Bhd which has a 12.58% equity interest in the company. Big Victory is the vehicle of Ho Shau Kian, Datin Lai Mooi Far and Winnie Lim Lee Chuen.

Low, has a 7.1% stake. He was managing director of Road Builder (M) Holdings Bhd before the company was taken over by construction powerhouse IJM Corp Bhd.

Brokers said Fajarbaru’s main shareholders enjoy close relations with the MCA, ties that have helped the company secure several contract awards. Fajarbaru secured a RM13.65 million contract last month to supply and commission a visual docking guidance system and all associated work at the Kuala Lumpur International Airport in Sepang, Selangor.  

In March, Fajarbaru won a RM72.92 million job to pull down a building and develop a new facility at the premises of Shaw Parade in Kuala Lumpur. That contract came on the heels of another award to build five hangars at the Sultan Abdul Aziz Shah Airport in Subang.

For its nine months ended March, Fajarbaru suffered a net loss of RM1.15 million from RM132.34 million in sales. For the corresponding period a year ago, the company raked in RM11.54 million of net profit from RM126.01 million in sales.

The losses, Fajarbaru said, were a result of recognition of costs for variation order claims.    

This article appeared in The Edge Financial Daily, June 13, 2012.