Construction sector rated 'neutral' by OSK

Domestic contracts are expected to be higher this year, mainly fuelled
by some packages of the Sungai Buloh-Kajang mass rapid transit elevated
line works, says a leading research house.

OSK Research said the
"V5-V5" packages, costing RM500 million to RM600 million each, are
expected to be awarded sometime next month or in March.

"We
should also see some awards coming from the recently-revised value of
KLIA2 from RM2 billion to RM3.9 billion," it said in a research note.

From
a full year perspective, OSK said it expects to see an overall increase
this year in domestic jobs, but the magnitude was hard to ascertain at
this juncture.

"To justify our views, if all the elevated packages of the Sungai
Buloh-Kajang
elevated line were awarded this year, the value of this portion of the
project alone would have already matched that of the total domestic
contracts for last year," it said.

The research house said the
domestic contract in the fourth quarter of last year totalled RM2.2
billion, while the full year domestic jobs came to RM11.9 billion, down
24 per cent year-on-year.

"Nonetheless, we maintain a "neutral"
rating for the construction sector, given its high beta nature and our
overall market strategy to sell into strength, coupled with the fact
that it under-performed by 11 to 15 per cent in the last three major
market downturns," it added. -- Bernama