Maybank IB Research is maintaining a positive outlook for the construction sector, backed by potential flow of job awards, which is expected to pick up again in the second half of 2017 and into 2018. Earnings delivery of construction players with robust order books would be in the limelight as major infrastructure projects accelerated. “Our sector’s top ‘BUY’ pick is IJM Corporation Bhd as a direct proxy to growing Chinese investments in Kuantan. The research house also picked Sunway Construction Group Bhd (SunCon) as its mid-cap choice as it was the only pure major construction stock with strong earnings visibility and potential for higher order book replenishment. Based on historical trends, infrastructure job awards would pick up in the second half, expecting the major packages of the Klang Valley Light Railway Transit 3 to kick off first. Maiden packages from the East Coast Rail Line and Gemas–JB double track rail should be awarded as wel, it said. The tabling of 2018 Budget on Oct 27, 2017 is a key event to reaffirm infrastructure development with financing from direct government development expenditure and off the government’s balance sheet.
Source: Bernama
