Monday 22 Apr 2024
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KUALA LUMPUR (Sept 28): Customary brick-and-mortar beneficiaries such as the construction and infrastructure sectors are noticeably lacking this time round in the 12th Malaysia Plan (12MP), a five-year plan covering the period from 2021 to 2025, PublicInvest Research said.

It noted that this is evident from the country’s shift towards digital-based infrastructure as drivers of future growth.

"The 12MP focuses on eight industries that are expected to catalyse economic growth in the next half-decade — electronics and electrical (E&E), global services, aerospace, creative, tourism, halal, smart farming and biomass. A special mention was also made regarding the need for a comprehensive transformation of the water sector, the strengthening of telecommunications services and transforming the logistics ecosystem for greater efficiency," the local research house said in a report on Tuesday. The 12MP was tabled in Parliament by Prime Minister Datuk Seri Ismail Sabri Yaakob on Monday.

CGS-CIMB Research said while it is overall positive on the 12MP’s headline RM400 billion development expenditure allocation, the lack of details of prospects of new megaproject roll-outs in 2022 is unlikely to excite the construction sector.

In his speech on Monday, Ismail Sabri said the government will continue to operate with limited fiscal space to launch new high-impact mega development projects in 2022, but expects a turnaround in 2023. In 2022, it will focus on the progress of ongoing contracts that have been disrupted by the Covid-19 pandemic, such as Phase 1 of the Klang Valley Electrified Double Track, the Gemas-Johor Baru Electrified Double Track and the East Coast Rail Link (ECRL).

However, the Mass Rapid Transit 3 (MRT 3) and the Kuala Lumpur-Johor Baru High Speed Rail (HSR) projects were not mentioned in the 12MP, which the CGS-CIMB Research deemed a setback, “although we suspect they could re-emerge in Budget 2022 on Oct 29 once proper planning and feasibility reviews are in place”.

“HSS Engineers Bhd and Taliworks Corp Bhd are potential beneficiaries of the RM26 billion allocation for the water sector, while we stick to Gamuda Bhd as our top pick for a revival of the MRT 3,” it said.

Post 12MP revelations, CGS-CIMB Research maintained its “neutral” rating of the sector.

Meanwhile, PublicInvest Research believes that the stock market will continue to be very much a trading-oriented one for now. “It is, however, encouraging to note that foreign investors have been net buyers in recent weeks, suggesting the regional investor flow potentially picking up in momentum as the country’s growth prospects continue to strengthen.”

The research firm maintained its FBM KLCI year-end 2021 closing target at 1,590 points. "Our stock suggestions are a mix of cyclical names to capture upsides from the eventual economic reopening and business normalcy, and stocks are likely to see multi-year growth stories,” said PublicInvest Research.

In early trade on Tuesday, the KLCI was trading at 1,533.75 points.

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