Construction sector back on track after lifting of ‘political clouds’
The construction sector is expected to get a boost after the outcome of the hotly contested state elections saw the status quo maintained, lifting the dark political clouds that have weighed down the Malaysian economy.
This has prompted RHB Investment Bank Bhd (RHB IB) to retain its “overweight” call on the sector, in a note yesterday.
The research house is upbeat on the sector, citing expectations of a more robust federal government that can prioritise programme implementation and reforms, potentially resulting in an acceleration of government job opportunities in the upcoming months.
The state polls concluded with the unity coalition of Pakatan Harapan and Barisan Nasional keeping control of Selangor, Penang, and Negeri Sembilan while Perikatan Nasional strengthened its grip on the states of Kedah, Kelantan, and Terengganu.
RHB said infrastructure initiatives gaining momentum include the Mass Rapid Transit 3 (MRT3) project with an ongoing cost assessment, the Bayan Lepas Light Rail Transit (BLLRT) project, and the final stage of the Pan Borneo Highway development.
Meanwhile, the re-elected Penang government, now potentially backed by state funding, is poised to enhance collaboration with the federal authorities, potentially expediting the commencement of BLLRT operations by the close of the year.
Furthermore, it indicated that the ongoing prequalified tender phase for the government’s RM10.9 billion flood mitigation initiatives across the country could experience advancements, potentially diverging from the initial timeline set for a June launch.
“Hence, we may see further upside in terms of the value of jobs awarded to contractors in the coming months,” RHB said.
Moreover, it noted the total value of construction contracts granted in the current year so far has reached RM59.4 billion, versus the RM77.6 billion recorded in the previous year.
The research house named Gamuda Bhd, Sunway Construction Group Bhd (SunCon), and Kerjaya Prospek Group Bhd as its top picks due to their consistent track records in securing new projects.
The “buy” recommendation for all three groups was maintained, accompanied by target prices of RM5.27 for Gamuda, RM1.55 for Kerjaya Prospek, and RM2.08 for SunCon.
Source: FMT Online
ya more development funds for states that support the federal government, forget the rest since they are not interested in development anyway…
@Oh nice
Let’s not relate it to support of the political view, this is not a threaten regardless of who wins the states.
We make it simple, rakyat has to show the demand. If the pondok bus station and digging well for water also acceptable in 2023, who dare to make investment, later siap bina but no demand.
But we all know most off-city states would like to stay near to nature(or lower expenses) in their home town, yet enjoying city level of salary, what to do? Their hometown just a place they go back to vote and Raya but no more. Who want to invest here ?
However, this topic easily manipulated those weak-minded that the federal refused to invest because of no support.
This will be good news for MRT/LRT in Penang. Awesome that it will be close to Penang World City and further increase the price of property over there
Penang only have few years left when it aligns with the federal government ..this window of opportunity will close once the green men take over the whole country… i foresee Penang will be going downhill from there and Penang World City will be reduced to Penang Worst City…