Construction Sector

Econpile Holdings BerhadEconpile Holdings Bhd, a piling and foundation works specialist, is scheduled to be listed in Main Market of Bursa Malaysia on 30th June 2014.

The Initial Public Offering (IPO) consists of 90 million new ordinary shares and offer for sale of 55 million shares at an IPO price of RM0.54 per share at RM0.20 par value. 114.5 million will be for private placement, 3.5 million shares to the eligible directors and employees while the remaining 27 million shares will be opened to the Malaysian public.

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 The impending general election may be wrong-footing stock market investors due to uncertainty concerns. But if you are one of those banking on the current administration staying in power, there are some stocks that are worth taking a bet on.

These are companies that are doing well but which also have a political flavour one way or the other. These could be in the form of government contracts, shareholdings or just personalities involved in their key management or ownership.

The table below is eight stocks to keep on your radar.

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OSK maintaining an OVERWEIGHT rating on the construction sector as its underperformance is unjustified given the strong contract wins in 2012. Based on tracking of jobs flow on Bursa Malaysia, Malaysia’s public-listed contractors had secured close to RM25bn worth of contracts as of 9M12.

Things certainly look rosier for 2013, during which more meaningful earnings contribution from works carried out on the KV MRT may be expected.

OSK continue to like Gamuda (BUY, FV: RM4.90) among the big caps counters and KimLun (BUY, FV: RM2.46) for small-cap counters.

Below are the target price, market capitalization and rating for selected stocks in construction sector.

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Gabungan AQRS Berhad

Gabungan AQRS Bhd, a construction and property developer is scheduled to be listed in Main Market of Bursa Malaysia on 31st July 2012.

The Initial Public Offering (IPO) consists of public issues of 62 million new ordinary shares and offer for sale of 30 million of existing shares for private placement at an IPO price of RM1.18 per share at RM0.25 par value.

Out of 62 million new ordinary shares, 38 million shares are for private placement to selected investors, 18 million shares for application by Malaysian public and the remaining 6 million shares are made available to directors, employees and business associates of Gabungan AQRS Berhad.

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In view of the bullish sentiment in global equity markets as well as the increasingly upbeat sentiment on the construction sector fuelled by the flow of positive news, OSK is maintaining OVERWEIGHT call on the sector.

There are plenty of trading opportunities in the run-up to the official awards of contracts by the Government.

Given the ruling Government’s focus on getting a two-thirds majority in the upcoming General Election, OSK do not expect further delays in the implementation of these mega billion-ringgit infrastructure projects as the ruling coalition goes all out to win the hearts and votes of the rakyat.

Below are the target price, market capitalization and rating for selected stocks in construction sector.

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