Can construction stocks regain their lustre?
Cheah Chor Sooi | 20 Jul 2018 00:30
Sentiment on construction counters which were trading near their lows was lifted by renewed optimism on July 12 following the government’s announcement that the Light Rail Transit project from Bandar Utama in Petaling Jaya to Johan Setia in Klang, or LRT3, will proceed at half the cost.
On the back of renewed buying interest in key construction counters expected to benefit from the go-ahead, the Kuala Lumpur Construction (KLCON) index climbed 6.8% from a low of 194.36 on July 11 to close at 207.50 on July 17, a span of three trading days.
No thanks to uncertainties that have been eclipsing the construction sector, particularly with regard to a review of exorbitant infrastructure projects after the 14th General Election (GE14), the KLCON index has been subjected to severe bashing in recent times.
The index plunged from an all-time high of 344.90 points in May 2017 to 195.79 as of end-May this year. Year-to-date (YTD), the index has shed 32.8% from 309.57 on Jan 2.
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