In search of a silver lining
Cheah Chor Sooi | 02 Nov 2018 00:30
Construction counters on Bursa Malaysia are expected to remain below the radar of investors in the immediate to medium-term with imminent slowdown in project offerings and a series of cost revisions involving mega infrastructure projects.
With few positives to reap from Budget 2019, the KL Construction (KLCon) index is currently hovering near its 165-point low. This is almost half of its 2018 peak of 327.23 points on Jan 25. KLCon had plunged almost 42% from 281.13 on the eve of the 14th General Election to close at 163.34 as of Oct 30.
Having consolidated around the 275-point range, the index began a steep descent soon after GE14 on May 9. Uncertainties soon flared over cancellations, renegotiations and price revisions of several mega infrastructure projects.
The index attempted a recovery from mid-July to end-August, only to drift further southward with escalating uncertainties over both on-going and soon-to-commence projects.
On Oct 10, the KLCon index dipped to an all-time low of 162.91 in tandem with the 39-point or 2.2% drop of the FBM KLCI on concerns over the introduction of new inheritance and capital gains taxes to shore up the country’s finances.
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