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 today, OSK said the second quarter 2012 (2Q2012) 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% 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 Baru 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 2Q2012 totalled RM5.4 billion, up by over 100% 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% 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.