Bucking the positive trend in the broader market, the construction index dropped 36.35 points or 12.93 percent to 244.78 points, on the back of news of a mega projects review by the new Pakatan Harapan-led government, reported The Sun Daily.
In fact, construction stocks such as George Kent (M) Bhd, Ahmad Zaki Resources Bhd, Gabungan AQRS Bhd and WCT Bhd had already hit limit-down.
George Kent, which along with MRCB are project delivery partners (PDP) for LRT3, saw its share price fall 29.9 percent or RM1.18 to RM2.76.
WCT and Ahmad Zaki shares shed 38 sen and 30 sen to close at 90 sen and 42 sen, respectively.
Witnessing heavy selling pressure, Gamuda’s share price fell 17.5 percent or 89 sen to RM4.21.
The company, which had been active in the local construction scene, holds a PDP role with MMC for the MRT1 and MRT2 project. Recently, Gamuda was also appointed – along with MRCB – the PDP for HSR project’s northern section.
The drop in prices came as Prime Minister Tun Mahathir Mohamad had promised to review mega projects such as the East Coast Rail Line (ECRL) and the Kuala Lumpur-Singapore High Speed Rail if Pakatan Harapan wins the election.
With the uncertainty of the mega projects’ implementation, Lee Chung Cheng, Research Head at JF Apex Securities, does not expect any bargain hunting for construction stocks in the near future.
“Maybe there will be some rebound, but the market still needs more clarity,” he said.
In concurring, Areca Capital Sdn Bhd CEO Danny Wong Teck Meng said a period of two to three months is needed by the construction industry to achieve more certainty.
“Valuations of some construction stocks are too ahead, it’s time to look at fundamentals.”
Image sourced from NST Online
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