PETALING JAYA: The recent headlines on the Kuala Lumpur-Singapore High Speed Rail (HSR) and the East Coast Rail Link (ECRL) projects are putting construction and building materials stocks on the radar of investors on Bursa Malaysia.
Some construction and building materials companies have seen their share prices rally since Monday after MyHSR Corp Sdn Bhd revealed its plans to appoint a technical advisory consultant to review the technical aspects of the HSR project’s cost-reduction options.
The HSR, which is currently on hold, could be revived as Prime Minister Tun Dr Mahathir Mohamad said today the government is looking at proposals aimed at reducing the cost of the project. It will be discussed further with Singapore before the end of the suspension period on May 31, 2020.
Notably, negotiations on the ECRL, which has been suspended due to its escalating price tag, are expected to be concluded by the end of this month, before Mahathir leaves for China for the Belt and Road Forum that starts on April 26.
Among the top gainers on Bursa Malaysia today were George Kent (Malaysia) Bhd, Ann Joo Resources Bhd-PA (preference shares) and Ann Joo Resources, which rose 11.67%, 18.18% and 4.54% to RM1.34, 65 sen and RM1.84, respectively.
Other construction and building materials counters that saw heavy buying included cement producer Lafarge Malaysia Bhd, Advancecon Holdings Bhd, IJM Corp Bhd, Ajiya Bhd and Tasek Corp Bhd which increased 2.41%, 5.62%, 1.3%, 1.83% and 0.55% to RM2.55, 47 sen, RM2.33, 55.5 sen and RM5.53, respectively.
“The KL Construction index has rebounded 33% from a low base year to date and from here the trend will be sustained when ECRL, HSR all come back to life,” Rakuten Trade Sdn Bhd vice-president of research Vincent Lau told SunBiz.
“We have been advocating the construction sector since February during our market outlook. Sentiment driven with the news of mega infrastructure projects headlines (are) driving the stock price now,” he added.
The proposed 350km HSR track between Bandar Malaysia in Kuala Lumpur and Jurong East in Singapore includes six stations in between – Putrajaya, Seremban, Air Keroh, Muar, Batu Pahat and Iskandar Putri. The journey from Kuala Lumpur to Singapore would be about 90 minutes with the travelling speed exceeding 300 kilometres per hour.
For the ECRL, Transport Minister Anthony Loke Siew Fook has confirmed that its alignment will be rerouted to benefit Negri Sembilan when it resumes after negotiations with the Chinese government at the end of this month. The new construction cost for the ECRL is expected to be much lower than the initial cost of RM81 billion.
Source: The Sun Daily