Posted by kk123 > 2014-05-06 08:13 | Report Abuse

Highlight: Is it time to sell construction shares, with expected slowdown in contract flows & cooling of property market? The Edge Weekly provides pointers. by Surin Murugiah of theedgemalaysia.com on Monday, 05 May 2014 04:49 KUALA LUMPUR (May 5): The Edge Weekly, in its latest edition, has cautioned investors of a slowdown in construction contract flows and a cooling property market ahead and asked if it was time for investors to take their money off the table. Some economists are expecting the construction sector to grow at a slower pace than the consensus forecast of 10% this year, it said. The Edge Weekly, in its in-depth cover story this week, noted that the RM200 billion worth of jobs in the pipeline for the next 20 years had been carrots for investors and driven up valuations. Construction stocks are performing twice as well as the broader market. However, as the government nears the end of its fiscal rope and with the property market expected to slow down, investors will have to reassess the potential risk of delays in these government mega projects, it said. The paper said that although the short and mid-term fundamentals of most of the construction players are still intact and they have sizeable order books to keep them busy until the end of next year, the problem is that many of the mega-projects in the pipeline will not be awarded anytime soon. Quoting the views of Gadang Holdings Bhd’s major shareholder and managing director Tan Sri Kok Onn, the Edge Weekly said that the only major projects that will go ahead this year are those from Petronas in the form of RAPID and RAPID Phase 2.