KUALA LUMPUR (May 18): Buying interest in Bursa Malaysia’s construction stocks gained momentum today on anticipation of pump-priming initiatives to be introduced by the government to revive the economy.
The new government is officially back to business after the first meeting of the third term of the 14th Parliamentary session this morning.
In mid-afternoon trading, Bursa Malaysia’s Construction Index extended its gain to be up by 6.1% at 169.52. The sector gained around 4% in the morning session.
Active construction counters include Ekovest Bhd, which rose 13.13% or 6.5 sen to 56 sen, with 93.21 million shares traded.
Top gainers within the sector include Gamuda Holdings Bhd (up 25 sen or 7.65% to RM3.52), IJM Corp Bhd (up 11 sen or 6.71% to RM1.75) and WCT Holdings Bhd (up 5.5 sen or 11.7% to 52.5 sen).
CGS-CIMB said in a sector note today there might be potential good news revolving around the possibility of favourable developments for the KL-Singapore high speed rail (HSR) project as the end-May review deadline nears.
However, given the disruptions caused by the Covid-19 pandemic and limitations from the partial lockdown in both Malaysia and Singapore, CGS-CIMB said the end-May deadline could be delayed into the third quarter of the year.
On the other hand, the research house expects negative implications towards projects under the Penang Transport Masterplan (PTMP) due to the potential abortion of the highway deal as sources within the finance ministry have said the government’s priority at the moment was to revive the economy, not the highway deals.
This is due to the fact that one of the immediate sources of working capital funding for the PTMP is proceeds raised by the highway concession owner from the highway deal.