affin hwang


Analysts maintained ‘neutral’ view on construction sector post 11MP mid-term review

KUCHING: Analysts have kept their ‘neutral’ view on the construction sector following the release of the mid-term review of the 11th Malaysia Plan 2016-20 (11MP) on Thursday. However, they believe that the slew of high impact projects announced should also signal the sector’s sustainability. According to the report, public investment is projected to contract at […]

Affin Islamic issues RM300m AT1 Sukuk Wakalah

KUALA LUMPUR, Oct 18 — Affin Islamic Bank Bhd, a wholly-owned subsidiary of Affin Bank Bhd, has issued a RM300 million AT1 Sukuk Wakalah under its sukuk programme. In a filing with Bursa Malaysia today, Affin Bank said the AT1 Sukuk Wakalah would…

CPO production this year to peak in October, November

KUCHING: The plantation sector’s crude palm oil (CPO) production has been projected by analysts to likely peak in either October or November. From the research arm of Kenanga Investment Bank Bhd’s (Kenanga Research) channel checks with planters, it gathered that the adverse effect of El Nino and La Nina has largely subsided. “Therefore, production is […]

Analysts lower growth rate as Malaysia sees lowest trade surplus in 45 months

KUCHING: A sharp slowdown in Malaysia’s exports relative to its imports in August led to a narrow trade surplus balance to RM1.6 billion – the lowest surplus seen since October 2014. This led analysts to lower their growth expectations for the country. Kenanga Investment Bank Bhd (Kenanga Research) saw that exports growth fell by 0.3 […]

Construction sector outlook still challenging

PETALING JAYA: The outlook for the local construction sector remains challenging as the government is reviewing ongoing infrastructure projects to reduce costs by 20% to 33%, said Affin Hwang Capital.

Projects that could be affected include MRT2 and LRT3, Pan Borneo Highway and Gemas-Johor Baru double-tracking projects.

Affin Hwang Capital said MRT2 could see a 25% reduction in cost to RM24 billion from an initial estimate of RM32 billion. The MMC-Gamuda JV will be the most affected as it is the main contractor for the underground section and the project delivery partner (PDP) for the aboveground section of MRT2.

“Since the cost reductions will come from the reduction in the scope of works, we believe only the contract values will be reduced while profit margins should be preserved,” it said.

For LRT3, the construction cost could be slashed to RM9 billion to RM10 billion from an initial estimate of RM15-16 billion.

“The MRCB-George Kent JV will be most affected as the PDP for the project. We maintain our forecasts for MRCB as we believe we were conservative in our contract value assumption at RM9 billion for the LRT3 despite the previous escalation in cost. Other contractors affected include Gabungan AQRS Bhd, IJM Corp Bhd, Sunway Construction Group Bhd and WCT Holdings Bhd.”

Having said that, Affin Hwang Capital noted that there are opportunities in state government projects in Penang and Sarawak.

The Sarawak state government plans to complete the upgrading of the coastal highway and trunk roads at an estimated RM11 billion. Potential beneficiaries are Cahya Mata Sarawak Bhd and Hock Seng Lee Bhd.

Meanwhile, the Penang Transport Master Plan is pending approval by federal government authorities and public feedback collection is ongoing. The Pan Island Link 1 Highway and George Town-Bayan Lepas Airport LRT is estimated to cost RM16 billion. The Gamuda-led SRS Consortium is the PDP for the project.

Affin Hwang Capital is maintaining a “neutral” call on the construction sector due to the risk of order book reductions.

“However, we believe the concerns are reflected in current share prices. Our top buys are IJM Corp Bhd, Sunway Construction Group Bhd and HSS Engineers Bhd.”

Construction companies reported mixed results in Q2, with most seeing slower sales and progress billings due to general election uncertainties. However, construction earnings for most companies showed positive growth momentum.

Spate of fresh contracts a boost for Sapura Energy

KUCHING: Analysts give two thumbs up to Sapura Energy Bhd (Sapura Energy) being awarded four contracts – three new engineering and construction (E&C) contracts and one drilling extension contract – for a total of RM815 million. This led the stock to become the top most active yesterday with more than 190.62 million shares being traded at […]

Further upside to Serba Dinamik with favourable outlook

KUCHING: Analysts have revealed that they see further upside to Serba Dinamik Holdings Bhd’s (Serba Dinamik) earnings per share (EPS) growth with CSE Global (CSE) riding on a favourable outlook in the shale-oil production space. Affin Hwang Investment Bank Bhd (Affin Hwang) highlighted this after recently hosting Serba Dinamik and CSE management on a NDR […]

Corporate Malaysia: Searching the horizon for answers

It has been a quarter of change for Malaysia in general, with a new government at the helm penning out new rules and policies in their aim to help the country reclaim the potential that it has. As Corporate Malaysia ponders what this means in terms of business operations, the uncertainty is reflected in the […]

Final lap of tax holiday spurs auto sales

KUCHING: The auto sector’s total industry Volume (TIV) saw a 27 per cent jump to 65,600 units in August 2018 as analysts believe consumers took advantage of the final month with zero-rated Goods and Services Tax (GST). The team at Affin Hwang Investment Bank Bhd (AffinHwang Capital) said with consumers taking advantage of cheaper cars […]

Malaysia’s inflation to gradually rise after SST implementation

KUCHING: Malaysia’s inflation has been projected to gradually rise after the implementation of the sales and service tax (SST) beginning September 2018. The research arm of Kenanga Investment Bank Bhd (Kenanga Research) expected inflation to gradually rise after the implementation of the SST in September along with the impact of a weaker ringgit which could […]