4th July, 2012
KUALA LUMPUR: OSK Research Sdn Bhd is maintaining its ‘overweight’ call on the construction sector as it expected the flow of contracts to be awarded in the next few months to continue to drive the sector.
In a note yesterday, OSK said the second quarter 2012 (Q2 2012) domestic contracts totalled RM5.1 billion as jobs from the Klang Valley Mass Rail Transit Sungai Buloh-Kajang (KV MRT SBK) line rolled out progressively, with about 77 per cent of the entire track awarded out year-to-date.
“We see this fuelling the jobs flow for the remainder of this year, partly boosted by the potential award of the Gemas-Johor Bahru Electrified Double-Track, West Coast Expressway as well as Kuala Lumpur Outer Ring Road,” it said.
OSK said its compilation of Bursa Malaysia’s announcements showed that the value of contracts awarded in Q2 2012 totalled RM5.4 billion, up by over 100 per cent year-on-year.
“This is boosted by the handing out of packages relating to KV MRT SBK line. However, this was down by some 66 per cent quarter-on-quarter as the single largest package in the SBK line—the RM8.2 billion underground portion—was awarded in the previous quarter,” it said.
It said Gamuda Bhd and Kimlun Corp Bhd remained its top buys at fair value of RM4.46 and RM2.37 respectively.