By Xavier Kong
The Klang Valley Mass Rapid Transit Phase 2 (KVMRT 2) should create some excitement in the property sector and construction sector, said Maybank Investment Bank today, which placed an overweight call on the construction sector and a Neutral call on the property sector.
“(The) construction sector will be the immediate beneficiary while property projects with close proximity to MRT stations would enhance in attractiveness,” noted Maybank IB, adding that three property projects in close proximity to stations have either received strong uptakes, or are close to fully sold.
As it is, the KVMRT 2 alignment will cater for the northwest and southeast corridors of the Greater Klang Valley, and Maybank IB opines that this should benefit areas such as Sentul, Serdang, the SKVE, Salak TInggi, Cyberjaya, and Putrajaya.
The bank-backed research house also notes key beneficiaries among property developers are SP Setia, YTL Land, PJ Development, IOI Properties, MRCB, Huayang, 1MDB’s Tun Razak Exchange, Land and General, SBC Corporation, Glomac, and Gamuda.
Maybank IB also noted that the final alignment of the KVMRT 2 by the end of 2014 will likely trigger another round of buying on properties near the new stations, but adds that demand would not be as strong as during the KVMRT 1 in 2011. This dip in demand is attributed to the affordability issue from interest rate hikes and the implementation of the Goods and Services Tax (GST), as well as stricter mortgage rules imposed by banks.
However, the construction sector would be a major beneficiary, as the whole KVMRT project will take until 2021 to be built, creating ample construction jobs and provide order book replenishment visibility in the long term.
The research house selects Gamuda as its top pick for the construction sector, as the group is the biggest beneficiary of the KVMRT project. Gamuda’s shares last traded at RM4.85, up 6 sen.
You must be logged in to post a comment.