MIDF stays positive on construction sector with encouraging developments in Sarawak

• In a sector update on Wednesday (Aug 17), the research house said the Sarawak government projects a capital injection of RM100 billion by 2028, envisioned to elevate the state into developed economy status.

KUALA LUMPUR (Aug 17): MIDF Research has maintained its “positive” rating of the construction sector, with encouraging developments seen in Sarawak.

In a sector update on Wednesday (Aug 17), the research house said the Sarawak government projects a capital injection of RM100 billion by 2028, envisioned to elevate the state into developed economy status.

It said the state’s current focus is to look into "sick" projects — those that were delayed or abandoned — and among the action plans are to appoint rescue contractors.

“Sarawak is committed to reimplementing projects shelved in 2018, and long-term plans stated in the Post-Covid-19 Development Strategy 2030 and to build roads are in place."

MIDF said about 84 sick projects had been identified in Sarawak, adding that this suggests quite a number of projects could be retendered, a good opportunity for construction players to replenish their order books.

“Our top picks for the Sarawak-themed play are Cahya Mata Sarawak Bhd ("buy"; target price: RM1.37) for being the sole cement manufacturer in the state, and also KKB Engineering Bhd ("buy"; RM1.50).

“KKB is an associate company of Cahya Mata, involved in civil construction and steel-related manufacturing,” MIDF said.