KUALA LUMPUR, March 29 ― Kenanga Research has maintained an “Overweight” call on the construction sector ahead of the roll-out of various mega public infrastructure projects such as the Mass Rapid Transit line 3 (MRT3), Bayan Lepas light rail transit (LRT), large-scale flood mitigation projects as well as the new Pan Borneo Highway packages.
In a note today, it said the RM45 billion MRT3 or MRT Circle Line will provide connectivity to the existing MRT, LRT, monorail and train lines in the Klang Valley through interchange stations while the RM9.5 billion Bayan Lepas LRT will help to ease the chronic traffic congestion on Penang island.
The others are the roll-out of six flood mitigation projects reported to be worth RM13 billion including flood mitigation works at Sungai Johor (Johor), the construction of the Sungai Klang-Sungai Rasau dual-function reservoir (Selangor) and the Sungai Golok Integrated River Basin Development Phase 3 (Kelantan), and new packages for the Pan Borneo Highway.
“We believe there will be enough jobs to go around for all players. We are unperturbed by a lower gross development expenditure of RM90 billion in Budget 2024 versus RM97 billion estimated in Budget 2023 as the government can tap into DanaInfra Nasional Bhd to fund these large-scale public projects on an off-balance sheet basis,” it added.
Kenanga Research said meanwhile, the private-sector construction market will stay vibrant, underpinned by massive investment in new semiconductor foundries and data centres.
“Malaysia is gaining traction in terms of destination for data centre investment, as evidenced by Tenaga Nasional Bhd having signed electricity supply agreements with nine data centres requiring a potential energy demand of 2,300 megawatts (MW).
“So far, nine data centres have been completed with a total energy demand of 635MW,” it said.
The research house said its top picks are Gamuda Bhd, IJM Corporation Bhd and Sunway Construction Group Bhd (Suncon),” it said. ― Bernama
