OSK: 'overweight' call on construction sector

OSK Research Sdn Bhd is maintaining its 'overweight' call on the
construction sector as it expected the flow of contracts to be awarded
in the next few months to continue to drive the sector.

In a
note today, OSK said the second quarter 2012 (Q2 2012) domestic
contracts totalled RM5.1 billion as jobs from the Klang Valley Mass
Rail Transit Sungai Buloh-Kajang (KV MRT SBK) line rolled out
progressively, with about 77 per cent of the entire track awarded out
year-to-date.

"We see this fuelling the jobs flow for the
remainder of this year, partly boosted by the potential award of the
Gemas-Johor Bahru Electrified Double-Track, West Coast Expressway as
well as Kuala Lumpur Outer Ring Road," it said.

OSK said its
compilation of Bursa Malaysia's announcements showed that the value of
contracts awarded in Q2 2012 totalled RM5.4 billion, up by over 100 per
cent year-on-year.

"This is boosted by the handing out of
packages relating to KV MRT SBK line. However, this was down by some 66
per cent quarter-on-quarter as the single largest package in the SBK
line -- the RM8.2 billion underground portion -- was awarded in the
previous quarter," it said.

It said Gamuda Bhd and Kimlun Corp Bhd remained its top buys at fair value of RM4.46 and RM2.37 respectively. -- Bernama

It said Gamuda Bhd and Kimlun Corp Bhd remained its top buys at fair value of RM4.46 and RM2.37 respectively

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