KUALA LUMPUR: The government's decision to allow a full reopening of operations in certain economic sectors has shone the spotlight on construction players as they work towards meeting the conditions set.
On Aug 15, the government announced that construction firms can increase their operational capacity to 100% from 60% previously, as long as they meet a requirement that 80% to 100% of their workers are fully vaccinated.
Amid the growing optimism, RHB Research said the increasing vaccination rate should facilitate the reopening of the construction sector by October.
"With vaccination rates reaching higher levels on a daily basis, it is likely that construction firms are able to inoculate at least 80% of their site workers by next month," it said.
"Upon a full sector reopening, productivity should improve in tandem with the easing restrictions.
"This should come with exciting developments on the reactivation of the Mass Rapid Transit Line 3 (MRT3) project, in our view," it added.
RHB expects works to commence in 2022, which will benefit contractors along the supply chain while the increase in productivity will help contractors to improve their margins from a low base as they benefit from economies of scale.
The research house remains "overweight" on the sector while its top sector picks are Gamuda and Kerjaya Prospek owing to supportive catalysts to buffer near-term risks and supportive orderbooks.
On Aug 15, the government announced that construction firms can increase their operational capacity to 100% from 60% previously, as long as they meet a requirement that 80% to 100% of their workers are fully vaccinated.
Amid the growing optimism, RHB Research said the increasing vaccination rate should facilitate the reopening of the construction sector by October.
"With vaccination rates reaching higher levels on a daily basis, it is likely that construction firms are able to inoculate at least 80% of their site workers by next month," it said.
"Upon a full sector reopening, productivity should improve in tandem with the easing restrictions.
"This should come with exciting developments on the reactivation of the Mass Rapid Transit Line 3 (MRT3) project, in our view," it added.
RHB expects works to commence in 2022, which will benefit contractors along the supply chain while the increase in productivity will help contractors to improve their margins from a low base as they benefit from economies of scale.
The research house remains "overweight" on the sector while its top sector picks are Gamuda and Kerjaya Prospek owing to supportive catalysts to buffer near-term risks and supportive orderbooks.
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