KUALA LUMPUR, Jan 15 — The country’s construction sector will continue its strong momentum, driven by mega infrastructure projects, says Maybank Investment Bank Research (Maybank IB).
Among them are the Sarawak Corridor of Renewable Energy (SCORE) in the 11th Malaysia Plan (11MP), says Maybank IB, which maintains an “overweight” call on the sector
The research house said it believed most mega infrastructure projects would still forge ahead despite concerns about fiscal deficits.
“We expect more positive new flows from tendering activities to job awards for these projects, but the positives would be back-loaded in the second half of 2015,” Maybank IB said in a note. “The unveiling of the 11MP in mid-2015 should reiterate the government’s commitment in advancing infrastructure development.”
Maybank IB said construction in Sarawak, particularly SCORE, would gain momentum in the run-up to the state elections by mid-2016.
On corporate exercises, the listing of Sunway Group’s construction unit and WCT Holdings Bhd’s malls in Petaling Jaya are expected in the second quarter of 2015 and the fourth quarter.
However, overall, new construction contracts in 2015 could be slower owing to the subdued property market outlook, the research house said.
It said the plunge in crude oil prices since June last year would prompt the government to reduce development spending, while raising concerns on probable delays in the awards of major infrastructure projects.
“However, we believe most major infrastructure projects, including the Klang Valley Mass Rapid Transit (KVMRT) 2, KVMRT 3, the Penang Integrated Transportation Plan, Klang Valley highways, and the Pan Borneo Highway would still go on,” it said.
Maybank IB reiterated the overweight call on the construction sector and a “buy” call for Gamuda Bhd. — Bernama
