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Malaysia's construction Stocks Are Ready to Grow
Malaysian construction stocks including Gamuda Bhd., IJM Corp. and WCT Bhd. are set to benefit from several "fat years" as the government accelerates a slew of development projects, Maybank Investment Bank Bhd. said.
Prime Minister Najib Razak is yet to award 12 billion ringgit ($3.4 billion) of contracts from two stimulus packages, Wong Chew Hann, a Kuala Lumpur-based analyst at Maybank, said in a report today. The first-quarter economic slump of 6.2 percent underlines the need for faster project implementation, Wong said. "The momentum of awards for construction jobs should quicken," Wong said in the report, reiterating an "overweight" rating on the industry. "Tenders and awards ought to lift the valuations of construction stocks." The rollout of all outstanding contracts has the potential to trigger Malaysia's first building boom since the Petronas Twin Towers and the Kuala Lumpur International Airport projects before the 1997-1998 regional financial crisis, Maybank said. Steelmakers, property developers and construction stocks are already among the year's top climbers on the nation's main index. IJM, helping to build a tunnel for an interstate Malaysian water project, has almost doubled in 2009 and is the second-best performer on the Kuala Lumpur Composite Index. Gamuda, jointly building a railway in the north of Malaysia, has surged 33 percent. WCT has jumped 27 percent.read source article