Wednesday, 5 January 2011

CIMB Keeps Malaysia Construction Sector Overweight

CIMB Research keeps Malaysia’s construction sector as Overweight, anchored by the public transportation upgrade theme; “we remain positive on the construction sector in 2011 and are encouraged by the progress of the MYR36 billion-MYR40 billion KL MRT (Kuala Lumpur mass rapid transit project), MYR7 billion LRT (light rail transit) extension and upgrade, and other outstanding jobs under the 10th Malaysia Plan (a 5-year infrastructure blueprint from 2011-2015) which are at various stages of tSee Titleer and proposal evaluations,” says analyst Sharizan Rosely. He notes this suggests project awards are likely to dominate newsflow in the next 6-9 months. “The potential approval of the MYR10 billion-MYR12 billion high-speed rail project is another boon to the sector,” he adds. He notes Gamuda (5398.KU) and WCT (9679.KU) remain house’s top picks for the sector. Gamuda is last flat at MYR3.94 while WCT is +0.3% at MYR3.21.

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