KUALA LUMPUR (July 5): CIMB Research said it continues to be optimistic on the outlook for large-scale projects over the medium term and expects the momentum of job awards to be strong in 2H12.
“We are encouraged by the slew of project awards in 1H12. 30 local projects totalling RM18.3 billion have been awarded since the start of the year and we expect the total value of contract awards in 2012 to hit RM30 billion- RM35 billion.
“This is more than triple the RM8.7 billion in 2010 and RM8.1 billion last year,” it said in a note July 4.
CIMB Research said contractors were becoming more upbeat about job award prospects.
The research house said this tied in with its view that transport infrastructure-driven projects would get the momentum going for even larger jobs from 2H12 onwards.
This should lay the foundation for more active newsflow beyond MRT, it said.
“Likely pre-election driven newsflow continues to anchor our Trading Buy call.
“The sector is not an Overweight given the overhang from Malaysia’s general election. WCT and Mudajaya are now our top picks as contract flows are likely to pick up, backed by better job visibility. They replace IJM Corp and Gamuda, which still stand to benefit from large-scale contracts,” it said.