Sector Update
- We are upgrading the construction sector to Overweight as we foresee construction stocks to generally outperform the market in 2H2010, buoyed by news flow, particularly, from: (1) The RM36bn KL MRT project; (2) The RM7bn Ampang and Kelana Jaya LRT line extension project; and (3) Federal land deals.
- While we believe the market is fully aware that certain negative elements are still lingering in the sector, we feel that it is likely to “brave” these negative elements and forge ahead with its move to position itself ahead of the curve, underpinned by the collective “buy-first-on-news” mentality.
- Our top “tactical” pick is Gamuda (Trading Buy, FV = RM3.85) while top “value” pick is Sunway (Outperform, FV = RM2.35).
RHB Equity 360° - 5 July 2010 (Construction, Wah Seong, Lafarge; Technical: SP Setia, TNB)
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