Kenanga IB bullish on construction sector amid mega projects

KUALA LUMPUR: Kenanga Investment Bank Bhd (Kenanga IB) remains bullish on the construction sector's outlook, driven by the impending roll-out of mega infrastructure projects such as the Mass Rapid Transit Line 3 (MRT3), Pan Borneo Phase 2 and flood mitigation initiatives.

Retaining its "overweight" call on the sector, the investment bank noted that private-sector building jobs, supported by significant investments in new semiconductor foundries and data centres, will also bolster the sector.

"Contractors under our coverage delivered a superb first quarter of 2024, with results either meeting or beating our expectations.

"The sector’s earnings should improve further throughout the year as work progresses and new projects come in," Kenanga IB said in a note today.

In addition to the aforementioned projects, Singapore's Prime Minister Lawrence Wong reportedly said yesterday that the republic is open to new ideas, including proposals for the Kuala Lumpur-Singapore High-Speed Rail (HSR) project.

This will be discussed at the 11th Malaysia-Singapore Leaders’ Retreat, scheduled to be held in Malaysia later this year.

Wong mentioned that during the retreat, Singapore would review the progress of ongoing discussions between the two countries.

"And of course, along the way, there may be new ideas that come up, and we are open to hearing from Malaysia if there are proposals for the HSR project," he said at a joint press conference with Prime Minister Datuk Seri Anwar Ibrahim in Putrajaya yesterday. - Bernama

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